Under the terms of the agreement, Invitrogen is to acquire Dynal from majority owner Nordic Capital for approximately NOK 2.5 billion (€300 million). Dynal becomes the 15th company Invitrogen has acquired since going public in 1999. Last month Invitrogen paid $60 million to buy antibody maker Zymed Laboratories. In addition it becomes the first company acquired by Invitrogen to have FDA-regulated products within its portfolio.
The deal, which is to be completed by the first quarter of 2005, is expected to generate revenues of approximately $74 million for the period of April through December 2005. The deal is also expected to raise Invitrogen's 2005 revenue to $1.18 billion from $1.16 billion.
The acquisition further strengthens Invitrogen's position as a provider of diagnostic and cell separation technology. Additionally, the purchase of Dynal's microsphere and magnetic bead tools will give the company the opportunity to fuse its technology accelerating disease research and drug discovery.
One example of Invitrogen/Dynal synergies in healthcare could involves treatments that focus on strengthening a patient's own immune system. Separating specific cells that play a key role in fighting disease is a cornerstone of this immunotherapy.
By coupling the Dynabead technology with targeted antibodies from Invitrogen's collection, obtained through its purchase of Zymed Laboratories, researchers will have a system capable of identifying and isolating important cells from a single blood sample.
The company additionally intends to apply Dynabead technology to enhance its products for assay development, RNA interference, DNA cloning and proteomic analysis. The Dynabead technology has a number of screening applications where Invitrogen's fluorescent labelling and detection products will enable scientists to visualise the results made possible by the use of Dynabeads.
In a conference call with investors and analysts, Adam Taich, investor relations at Invitrogen, one of the goals in acquiring Dynal Biotech was to achieve an 8-10 per cent organic growth.
"Dynal is a company that is growing at a rate of 10 per cent year on year. With Invitrogen on board we fully expect Dynal to grow by 15 per cent next year," he added.
During the conference call, Greg Lucier, chief executive at Invitrogen, highlighted Dynal's international presence. With Dynal capturing forty-four percent of the North American market, this has given them the incentive to explore areas of Europe and particularly China, which Invitrogen has targeted as potential area for booming future growth.
Invitrogen already has about 170 employees there, working for BioAsia, a company it acquired last December.
Lucier went on to explain that Invitrogen were not looking to compete with companies that make diagnostic tools such as Roche and San Diego-based Gen-Probe. Indeed, Dynal products would enable Invitrogen to offer an expanded selection of products those companies can use in making their diagnostics.
"The additional revenue expected from Dynal should allow Invitrogen to increase the amount it spends on research and development from about 7 per cent to 10 per cent," he added.
He also added that there were opportunities for combining Dynal's technologies with products Invitrogen already offered its customers.
Dynal's "smart" surface technology is one such example, which Invitrogen plan to use to produce expanded sets of matched reagent solutions around genes, antibodies, enzymes, cell culture media and detection products.
These combined technologies would have applications in areas of research, such as stem cell and cell therapy applications, as well as new products that support molecular diagnostics. In addition, Dynal specialise in tissue typing (HLA diagnostics) used to ensure compatibility between donors and recipients in organ and bone marrow transplants.
"The company's technology also has many potential applications in stem cell and cell therapy research," said Lucier. "This is just a core technology in a biotech world."