Acquisition will broaden life sciences consumables product portfolio
Corning Incorporated (NYSE: GLW) announced today that it has reached a definitive agreement with BD (Becton, Dickinson and Company) (NYSE:BDX) to acquire the majority of its Discovery Labware unit for approximately $730 million in cash. The acquisition is expected to be completed later this year, subject to customary closing conditions, including receipt of regulatory approvals.
"The Discovery Labware unit's extensive product portfolio and established dealer network will significantly improve Corning Life Sciences' offerings to customers and is a critical part of Corning's long-term growth strategy," Wendell P. Weeks, chairman, chief executive officer and president, said. "With sales of approximately $235 million, the acquisition will expand Corning Life Sciences' annual revenues by 40% and catapult the segment toward its goal of being a $1 billion business by 2014. And, the acquisition provides added momentum for Corning to achieve our $10 billion revenue target in the next few years," he added. Corning expects to reach this revenue goal through a combination of organic growth and strategic acquisitions.
When complete, the acquisition will augment Corning's global market access and enhance its broad portfolio of life sciences products in the areas of drug-discovery tools, bioprocess solutions, and laboratory research instruments. Corning will integrate four of the Discovery Labware unit's main product platforms: plastic consumable labware (including tubes, pipettes, Petri dishes, tissue culture dishes, and flasks); liquid-handling products; cell-based assays and cell cultureware; and ADME research into the Corning Life Sciences business segment upon closing of the acquisition.
"We are extremely excited and proud to add these talented people, proven research ability and established and well-respected products to Corning Life Sciences," Dr. Richard M. Eglen, vice president and life sciences general manager, said. "We have a history of successfully integrating businesses into our organization and we see multiple synergies that are possible once the acquisition is complete. We look forward to bringing these two dynamic organizations together, and providing a more comprehensive line of products and services to customers worldwide."
James B. Flaws, vice chairman and chief financial officer, said Corning will use a portion of its domestic cash balances to fund the transaction. "We plan to continue our current share repurchase activity and maintain our ability to provide additional shareholder distributions in the future, should the board of directors choose to do so," he remarked. The company projects that the transaction will be slightly accretive in 2013. "We expect this to grow to $0.05 per share, excluding purchased intangibles amortization, when full integration into our existing business is complete by 2016," Flaws said.
"Life Sciences is an attractive growth industry and has low capital intensity. We expect this acquisition to provide a stable stream of incremental cash flow to Corning as we become a more balanced company," Flaws concluded.
The Discovery Labware unit, headquartered in Billerica, Mass., has operations in Massachusetts, North Carolina, and the United Kingdom, and extensive dealer networks in Asia, Europe and North America.
Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning's financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political or financial instability, natural disasters, adverse weather conditions, or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; retention of key personnel; stock price fluctuations; and adverse litigation or regulatory developments. These and other risk factors are detailed in Corning's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.
About Corning Incorporated
Corning Incorporated (www.corning.com) is the world leader in specialty glass and ceramics. Drawing on more than 160 years of materials science and process engineering knowledge, Corning creates and makes keystone components that enable high-technology systems for consumer electronics, mobile emissions control, telecommunications and life sciences. Our products include glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; optical biosensors for drug discovery; and other advanced optics and specialty glass solutions for a number of industries including semiconductor, aerospace, defense, astronomy, and metrology.
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