Corning Closes BD Labware Unit Buy - Analyst Blog
02 Novembro 2012 - 2:38PM
Zacks
Corning Inc. (GLW) recently completed its
acquisition of the majority portion of the Discovery Labware unit
from Becton, Dickinson & Co. (BDX). 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
America.
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 3M Company (MMM), Tyco
Electronics, Ltd. (TEL), 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 months).
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