SD Biosensor and SJL Partners agreed to acquire Meridian Bioscience in an all-cash deal valued at about $1.53 billion, according to a statement by Cincinnati-based Meridian on Thursday.
SD Biosensor, a diagnostics company headquartered in South Korea, along with private equity firm SJL Partners, would create a new affiliate for the deal, Meridian said. Neither acquirer issued their own statements on the transaction.
Meridian’s stock opened at $33.21 on the news on Thursday. The acquisition price represents a 32% premium over the company’s share price when the deal was first announced.
“The transaction will enhance our ability to serve customers as we navigate the decline in COVID-19 testing demand and develop new products with the benefit of SDB's industry expertise and complementary offerings,” Meridian Chairman John McIlwraith said in the statement. He added the sale will “drive further growth in the diagnostics space."
SDB Chairman Dr. Young Shik Cho said in the same statement that Meridian would be “a great partner for accelerating our entry into the U.S. IVD market.” It plans to use SD Biosensor's research and development capabilities and “mass production know-how” alongside Meridian's U.S. distribution network and its “expertise in the regulated U.S. market.”
William Blair analysts wrote in a research note that the “valuation appears to be fair,” offering a 4.5-times multiple on the last 12 months of Meridian’s sales.
“In terms of performance, Meridian has been a standout in a disastrous year for the sector (and broader market) with the stock up 65% year-to-date and up 52% over the last 12 months,” they wrote, adding that the company has a clean balance sheet.
The analysts said Meridian can benefit from the scale of SD Biosensor, whose revenue grew to $4 billion at the peak of the pandemic. SD Biosensor went public last year, indicating it planned to spend a portion of its earnings on acquisitions.
Meridian was founded in 1976. It has a diagnostics platform that includes tests for COVID-19 and the company also makes testing reagents.