BioLife Solutions, Inc. (NASDAQ: BLFS) (“BioLife” or the “Company”), a leading developer and supplier of a portfolio of best-in-class bioproduction tools for cell and gene therapies, today announced the acquisition of substantially all of the assets of Custom Biogenic Systems, Inc. (“CBS”). CBS, a privately held company with operations located near Detroit, is a global leader in the design and manufacture of state-of-the-art liquid nitrogen laboratory freezers and cryogenic equipment. CBS also offers a related cloud-based monitoring system that continuously assesses biologic sample storage conditions and alerts equipment owners if a fault condition occurs. Revenue for 2019 is expected to be $10 million to $11 million.
CBS founder, sole shareholder and CEO John Brothers received $11 million in cash and $4 million of BioLife common stock in consideration for the asset sale. Brothers, now Vice President, Advanced Freezer Technologies at BioLife, may earn up to an additional $15 million in cash or stock over the next five years, based on exceeding certain annual new product revenue goals.
Mike Rice, BioLife President & CEO, commented, “We are keenly focused on assembling a robust portfolio of best-in-class cell and gene therapy bioproduction tools to reach our next financial milestone of $100 million in annual revenue. We believe that a hallmark of CBS products is innovative technologies realized through the company’s design and engineering expertise, and excellent automated manufacturing capabilities. We plan to integrate CBS’ operations to grow the product line, diversify our revenue and reduce supply chain costs for our evo® dry vapor shippers by having certain components manufactured by CBS. We believe that the acquisition of CBS will allow us to deepen engagement with our cell and gene therapy customers, and increase touchpoints in their manufacturing, storage and distribution workflows.”
John Brothers remarked, “The entire CBS team is excited to join BioLife. I started the company in 1987 with a goal to design and offer advanced liquid nitrogen freezers to safely store high-value biologic material. I’m thrilled to start this next chapter in the history of CBS and to leverage BioLife’s sales and marketing power, and their relationships in the cell and gene therapy industry.”
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The Global Cryopreservation Equipment Market, published by Market Research, estimates that the worldwide demand for liquid nitrogen freezers and other storage products will exceed $2 billion in 2020.
Benefits of the Transaction
BioLife expects the following benefits from the CBS acquisition, including:
Sales and Marketing Leverage: BioLife expects to leverage existing relationships among its customer base of leading cell and gene therapy companies in the regenerative medicine market. CBS’ advanced liquid nitrogen freezers play a critical role in the safe storage of high-value starting material, and manufactured cell and gene therapy products.
Manufacturing Capacity: To reduce reliance on non-U.S. suppliers and to lower costs, BioLife plans to leverage CBS’ engineering and manufacturing expertise to provide certain hardware components of the evo cold chain management system.
Financial Impact
Roderick de Greef, BioLife Chief Financial Officer, remarked, “CBS is an excellent strategic fit on several levels, including the positive impact of expected manufacturing cost reductions for certain evo-related hardware. We expect the CBS product line will contribute between $1 million to $2 million in revenue for 2019, and although we will realize some gross margin compression in the near term, we expect this transaction will be accretive on an adjusted EPS basis and contribute to adjusted EBITDA in 2020.
“With the addition of CBS, the full-year impact of the Astero Bio and SAVSU acquisitions, and continued media revenue growth, we believe 2020 revenue will be between $50 million and $56 million, or 69% to 90% growth over the midpoint of our 2019 guidance. We will provide additional 2020 financial guidance during our 2019 fourth quarter and full year conference call planned for March of next year.”
Source: Prnews Wire