In an attempt to expand its global footprint,
Life Technologies Corporation
), recently acquired a South Korea-based distributor, Life
Science Korea (LSK). As per LIFE, the acquisition, which is in
line with the company's 'go direct' strategy in South Korea, will
be accretive as the region is a major international market for
the company. Earlier in April, as a part of this strategy, LIFE
acquired KDR Biotech Co., a reagents distributor based in Seoul,
Since 1994, LSK has been the primary instrument distributor of
the company in Asia-Pacific and particularly in Japan. Apart from
Life Technologies' products, it also has the distribution rights
for the products of Applied Biosystems, including the
next-generation sequencing instruments, Sanger sequencing
systems, forensics and PCR products.
Life Technologies believes that its association with LSK and
KDR will prove to be successful, as together, the companies can
offer a channel to serve the versatile and growing demand of the
South Korean customers. Notably, the acquisition of KDR Biotech
remains in line with Life's Asia-Pacific Japan strategy to
further develop customer relationships, improve the customer
experience and increase revenues in the fast-growing South Korean
biotechnology market. This is in addition to Life's overall
strategy of expanding its footprint into the rapidly growing and
As a result of Life's increasing focus on emerging markets, at
the end of 2012, this region accounted for more than 10% of total
sales. While the company had derived revenues worth $188 million
in 2007 from this region, the figure is expected to shoot up to
$1.6 billion in 2015, representing a CAGR of 30%.
In the last two quarters, Life Technologies experienced
stronger growth in the emerging markets. In Mar 2013, China's
State Food and Drug Administration (SFDA) approved the company's
Applied Biosystems 3500xL Dx Genetic Analyzer for clinical
diagnostic use in China. Moreover, the company launched 10 Assays
from its joint venture with Daan Gene.
The development has been considered as a major extension of
Life Technologies' capabilities to serve the clinical end market
in China with Sanger-based solutions. With the company's
investment in this region covering multiple fronts, including
expansion of operational capabilities, China continues to be one
of the growth markets for Life Technologies. After recording a
temporary slowdown in the Greater China business about a year
ago, Life Technologies augmented its dealer model and
supplemented it with its own sales force. Through these efforts,
the company has successfully restored operations in Greater China
to normal levels with high-teens growth.
Life currently carries a Zacks Rank #3 (Hold). While the
upsides are already factored into Life's shares, we are more
positive about other medical stocks such as
Myriad Genetics Inc.
Natus Medical Inc.
). These stocks carry a favorable Zacks Rank #1 (Strong Buy).
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