GE Healthcare Acquires Xcellerex - Analyst Blog

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GE Healthcare, a unit of General Electric Company ( GE ) has signed an agreement to acquire Xcellerex, Inc., a supplier of innovative manufacturing technologies for the fast-growing biopharmaceutical industry. Through this acquisition, GE intends to expand its Healthcare offering of products and services for the manufacture of biopharmaceuticals such as recombinant proteins, antibodies and vaccines.

The financial terms of the deal were not disclosed; however the deal is expected to close by the second quarter of 2012, subject to regulatory approvals.

Xcellerex is a leading developer and producer of turn-key bio-manufacturing systems and production-scale bioreactors based around single-use components. These products provide major advantages such as faster installation, lower capital investment, reduced risk of cross-contamination and huge flexibility unlike the traditional manufacturing technologies.

Xcellerex has a modular technology that can be well integrated with GE Healthcare's cell culture products. Also being of a modular nature they will go down well with customers because of easier installation. This in turn will speed up deployment, thus showing quickly on GE Healthcare's top line.

For fiscal 2011, GE's Healthcare segment reported revenue growth of 7% and operating profit growth of 2% year over. Revenue growth for the year was primarily driven by increased volume from higher equipment sales and services and the effects of the weaker U.S. dollar. Geographically, the revenue growth was strongest in the emerging markets, followed by the U.S. and other international markets.

GE Healthcare (comprising 12.3% of the total revenue in fiscal 2011) is one of the world's leading providers of essential healthcare technologies to developed, developing and emerging countries. Its Medical diagnostics and life sciences segment develops and manufactures diagnostic imaging agents used in medical scanning procedures, drug discovery, biopharmaceutical manufacturing and purification and tools for protein and cellular analysis for pharmaceutical and academic research.

General Electric currently holds a Zacks #3 Rank, which implies a short term Hold' rating.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




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