Beckman to Acquire Hybritech : Medicine: Analysts say deal will round out buyer’s line of diagnostic tests. They speculate that Lilly sold at a loss.
FULLERTON — Beckman Instruments Inc. said Friday that it has agreed to acquire the once-soaring Hybritech Inc. medical test manufacturer from its parent company, drug maker Eli Lilly Co., for an undisclosed price.
The acquisition of Hybritech, with annual sales of about $80 million, would boost Beckman’s revenue to $1 billion and help round out the Fullerton company’s line of diagnostic tests, industry analysts said. Beckman also makes and sells medical instruments and supplies.
Analysts expect that Beckman will try to use Hybritech technology involving immunoassays to develop additional tests.
“I think the main reason they are doing this is to get hold of a piece of technology they can use,†said analyst Robert Dunne at Wasserstein Perella Securities in New York.
Hybritech has about 550 employees, including about 420 in the San Diego area. A Beckman spokesman wouldn’t say how jobs might be affected.
Industry trends, however, indicate that a company acquiring another will strip the marketing and distribution staffs of the acquired company, pushing newly acquired product lines through its own sales and distribution force.
Beckman should do a better job with Hybritech than Indianapolis-based Lilly has, analysts said.
Hybritech, once the brightest star among San Diego’s emerging biotechnology companies, lost luster after Lilly purchased it nine years ago, analysts said. Lilly finally decided to refocus its business on its core drug-making operations, and put Hybritech and its other medical devices and diagnostics businesses on the block early last year.
A Lilly spokesman said Hybritech’s sales totaled $123.6 million last year and $50.3 million for the first six months of this year. But the Beckman spokesman said the unit’s sales are running at an annual clip of about $80 million.
While neither Lilly nor Beckman would disclose terms of the deal, analyst Dunne speculated that Lilly sold it for less that what it paid to obtain it. Lilly paid “way too much†for Hybritech, he said, and is probably “embarrassed†about the presumably paltry pay-back it’s getting on the sale.
Numerous news reports in years following Lilly’s acquisition of Hybritech--which made millionaires of a handful of original shareholders--pegged its value at about $480 million. Lilly’s spokesman insisted Friday that the value was $350 million.
The deal with Beckman is expected to close Jan. 2, pending federal regulatory approval.
