Corning Buys Lab Supplies Business

Corning will pay about $730 million in cash to buy 75% of the discovery labware unit of Becton, Dickinson & Co. Expected to have sales this year of $235 million, the operations involved in the deal make and sell plastic consumable labware, liquid-handling products, cell-based assays, and life sciences research reagents. New Jersey-based BD will retain the discovery labware unit’s bioprocessing supplies business, which includes cell-culture media.

“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,” Corning CEO Wendell P. Weeks says. Over the next few years, New York-based Cor­ning hopes to hit $10 billion in annual revenues, up from $7.9 billion in 2011, through internal growth and acquisitions.

The life sciences business accounted for only 7.5% of Corning’s 2011 sales, Buckingham Research Group stock analyst John E. Roberts points out in a report to clients. Before the acquisition, he estimated that the business would post double-digit sales growth for 2012 and 2013. Meanwhile, Mizuho Securities USA analyst Peter Lawson recommends investing in reagent-focused companies for the stability they offer. He calls the BD unit a “cash cow, but low-growth business.”

Lately, BD has been rebalancing its business mix. With about $7.8 billion in annual sales, the company will focus on diagnostics, medical devices, and cell culture and analysis. The sale to Corning will enable BD to turn its attention to its own recent acquisitions and to newly launched instrumentation products, according to Executive Vice President William A. Kozy.