By Lori Solomon, Editor, Diagnostic Testing & Emerging Technologies
Global bioanalytical testing giant Eurofins Scientific (Luxembourg) and Emory University’s Emory Genetics Laboratory (EGL; Atlanta, Ga.) have entered into a joint venture. As part of the deal, Eurofins will acquire a 75 percent stake in EGL for approximately $40 million. Post-closing, the joint venture company will be renamed EGL Genetic Diagnostics.
EGL performs testing for rare genetic disorders, including gene panel testing for inherited genetic diseases, cancer testing, and exome sequencing for personalized medicine. It also serves as the follow-up laboratory for Georgia’s newborn screening program. The laboratory conducts over 35,000 tests annually for genetic diseases, carrier testing, and prenatal testing, with more than 80 percent of its analytical portfolio consisting of "first-to-market tests." EGL claims to have been the first academic laboratory to bring next-generation sequencing to the genetic testing market. The laboratory has a staff of 100 and currently serves 400 institutional clients, including hospitals and commercial laboratories.
Eurofins says that EGL is expected to generate over $15 million of revenue in 2015. But, more importantly, the joint venture is expected to strengthen Eurofins’ pharmaceutical service offerings and further expand the company’s presence in genomic testing services.
"This acquisition of EGL strengthens Eurofins’ growing footprint in the specialty clinical diagnostics market," says Gilles Martin, Ph.D., Eurofins’ CEO. "In combination with ViraCor, Boston Heart, and Diatherix, EGL provides Eurofins a leading position in the most technologically-driven segment of the specialty clinical diagnostic testing market."
In investor documents, Eurofins says it believes it is the "world leader" in food and feed, environment and pharmaceutical products testing and ranks among the "top three global providers" of central laboratory and genomic services. But the company adds it plans to strengthen its position through acquisitions intended to "give access to new customers, geographic markets, technology and innovation." This growth strategy is outlined in the company’s five-year strategic plan, which seeks to double revenues to $2.22 billion by 2017, with a 20 percent adjusted earnings before interest, taxes, depreciation, and amortization margin. In 2014, Eurofins reported revenues of $1.565 billion and the addition of 60,000 square meters of laboratory surface to its international network of 200 laboratories, with plans for another 100,000 square meters additional capacity between 2015 and 2017.
Eurofins has been actively expanding its footprint in the specialty clinical diagnostic testing market over the past year and has been aggressively making acquisitions in June. In addition to the Emory deal, Eurofins previously announced last month the purchase of infectious disease laboratory Diatherix (Huntsville, Ala.) for $50 million, as well as the acquisition of esoteric diagnostic testing service provider Biomnis (France) for $244 million and a $166.5 million investment (plus assumption of $83 million of debt) in French clinical laboratory group Bio-Access. In the second half of 2014, Eurofins announced the acquisitions of cardiovascular testing laboratory Boston Heart (Framingham, Mass.; $140 million) and infectious disease-testing laboratory ViraCor-IBT (Kansas City, Mo.; $255 million).