Charles River Laboratories International Inc.
) recently announced that it has acquired privately held Accugenix,
Inc. for approximately $17 million in cash. The acquisition has
boosted the company's in vitro (endotoxin and microbial
Erstwhile Accugenix, a world leader in cGMP compliant contract
microbial testing services, has provided microbial identification
services to various industries including the biopharmaceutical and
medical device industries.
Charles River expects the acquisition to have no impact on 2012
earnings, which are expected in the range of $2.60-$2.70 per share.
In 2013, it will account for 1% of sales and be slightly accretive
to earnings. The 2012 and 2013 Zacks Consensus Estimates are
currently pegged at $2.72 and $2.97, respectively.
Charles River operates through two segments - Research Models and
Services (RMS) and Preclinical Services (PCS). While the RMS
segment represents approximately 61% of net sales, PCS segment
represents 39% of net sales.
Thus, the performance of RMS segment is very crucial for the
company. We believe that the company will benefit from Accugenix's
vast experience in providing accurate, time-effective and
cost-effective microbial identification services.
The acquisition is in line with Charles River's strategy of
boosting its in vitro business through product extensions and
acquisitions over the next few years. We are pleased with the
company's efforts of expanding the in vitro business, which is the
company's fastest growing business.
We currently have a Neutral recommendation on Charles River. The
stock carries a Zacks #3 Rank (Hold rating) in the short run.
CHARLES RVR LAB (CRL): Free Stock Analysis
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