) recently completed its acquisition of the majority portion of
the Discovery Labware unit from
Becton, Dickinson & Co.
). The company spent $720 million in cash for the acquisition.
The deal was announced in the month of April.
The Discovery Labware unit has operations in Massachusetts and
North Carolina in the United States, and in the United Kingdom,
as well as extensive dealer networks in Asia, Europe and North
Corning will now integrate four of the Discovery Labware
unit's main product platforms into Corning's Life Sciences
segment. These product platforms include plastic consumable
labware, liquid-handling products, cell-based assays and cell
cultureware, as well as ADME research.
The company said that the acquisition will enhance Corning's
broad portfolio of life sciences products and expand its annual
revenues by 40%. In the third quarter, Corning's Life Sciences
business accounted for around 8% of revenue, which was down 4.3%
sequentially but up 1.3% from a year ago.
The deal will help Corning to expand its global market share
and benefit from Discovery Labware unit's extensive product
portfolio and established dealer network. In December last year,
Corning acquired Mediatech, which was also integrated into
Corning's Life Sciences segment to augment its sales.
Corning's innovations, technologies and acquisitions help it
to deliver improved results and maintain its position in an
increasingly competitive market. In the last-reported third
quarter of 2012, the company's earnings beat the Zacks Consensus
Estimate by 2 cents or 7.1%. Revenues in the quarter were $2.04
billion, up 6.8% sequentially and down 1.8% year over year.
Corningdoes not expect the acquisition to have any impact on
its 2012 financials, but believes that the transaction will be
slightly accretive in 2013. Additionally, the company stated that
the acquisition will aid in achieving its $10 billion revenue
target in the next few years.
However, Corning faces significant competition due to market
saturation, pricing pressure and product launches. For its
hardware and equipment products, the company faces stiff
competition from the likes of
Tyco Electronics, Ltd.
), Furukawa OFS, CommScope and ADC Communications.
Corning shares currently carry a Zacks #3 Rank, which
translates into a Hold rating for the short term (1-3
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