Charles River Laboratories, a US-based firm which provides various pre-clinical and clinical laboratory services, has signed a binding offer to acquire non-clinical contract research organization Citoxlab for about $510m.
Image: Charles River to acquire Citoxlab. Photo: Courtesy of Charles River.
Charles River expects the acquisition to close in the second quarter of this year.
Citoxlab specializes in regulated safety assessment services, non-regulated discovery services, and medical device testing, with operations in North America and Europe.
The company has a client base of biopharmaceutical, agriculture and industrial chemical, and medical device companies worldwide.
Charles River expects the acquisition to strengthen its scientific portfolio, position and expand its global reach as an early-stage CRO. The deal could help the company in partnering with clients across discovery and development continuum.
The acquisition can further expand Charles River’s small and mid-sized biotechnology client base.
Charles River Laboratories chairman, president and CEO James C. Foster said: “The proposed acquisition of Citoxlab would expand and solidify Charles River’s position as the partner of choice for our clients’ early-stage research needs, at a time when we believe there continues to be significant demand for outsourced services from both biotechnology and pharmaceutical companies.
“Citoxlab would be an exceptional strategic fit for Charles River because it incorporates the key attributes we require in an acquisition: scientific expertise, complementary capabilities, talented people, and access to growing end markets.
“The proposed acquisition would also enhance our geographic footprint, particularly in Europe, and our access to a growing biotechnology client base, enabling Charles River to provide a broader range of services proximate to our clients – both large and small.”
The company also expects that proposed acquisition could add $115m to $130m to this year’s consolidated revenue based on second quarter closing and about $200m of consolidated revenue for next year.
Citoxlab’s revenue is also expected to grow at a high-single-digit rate, consistent with long-term organic revenue growth target for Charles River’s Discovery and Safety Assessment (DSA) segment.
Increase in revenue could be translated as non-GAAP earnings per share which could range about $0.15 for this year and at least $0.35 for next year.
Citoxlab chairman and CEO Jean-François Le Bigot said: “Becoming part of the Charles River family would be a significant achievement and recognition of the accomplishments of Citoxlab and our dedicated team. After many years of growth, I am very pleased and excited to embark on a new era for Citoxlab. I am confident that Charles River is committed to our global employees and advancing our mission through our extensive scientific capabilities.
“At a time when new drug approvals are at record levels and the complexity of each drug candidate is increasing, we believe the collaboration of our respective scientific teams, the implementation of best practices, and the synergies between the early-stage services offered by Charles River and Citoxlab would represent a significant growth opportunity for both organizations, and also enhance the value that we provide to all of our clients to meet their individual needs.”