Luminex Acquires Nanosphere with Eye Towards Growth in Molecular Microbiology

By Lori Solomon, Editor, Diagnostic Testing & Emerging Technologies

Luminex (Austin, Texas) announced this week it will acquire molecular microbiology firm Nanosphere (Northbrook, Ill.) in a cash deal valued at approximately $58 million. The company says the purchase of Nanosphere is an “ideal strategic fit” and is expected to provide opportunities for future growth of both companies’ platforms.

Nanosphere’s Verigene platform offers a broad menu of assays that enable rapid detection of respiratory, gastroenteric, and bloodstream infections. Luminex views Nanosphere’s offerings and its customer base as complementary to its own product lines.

“The acquisition of Nanosphere will significantly enhance Luminex’s growth trajectory by expanding our product portfolio, delivering access to new markets and strengthening our pipeline of future products to make us the partner of choice for all molecular labs,” Luminex’s CEO Homi Shamir said in a statement. “The deal demonstrates prudent execution of our fourth strategic growth pillar—leveraging our financial strength to accelerate growth in our target markets.”

Nanosphere forecasts its 2016 revenue to be $28 million to $30 million (up from $21 million in 2015), which will immediately accelerate Luminex’s stand-alone projected revenue growth, the company says. Additionally, Luminex says that Nanosphere’s double-digit revenue growth can be further enhanced by leveraging its global molecular diagnostic distribution channels. The transaction, the company says, is expected to be accretive to Luminex’s adjusted earnings by the end of 2017.

Luminex reported strong first-quarter 2016 results earlier in the month, with earnings growing 36.5 percent year-over-year. This was driven, in part, by a 6.3 percent growth in assay revenues, which totaled $27 million. Infectious disease assay sales made up the majority of total assay sales (72 percent versus 28 percent for genetic testing). Molecular diagnostics now comprise about $28 million in Luminex’s revenues, driven by 20 percent growth in its infectious disease test portfolio. The company’s full-year 2016 revenue projections are in the range of $247 million to $255 million.

The boards of directors of both companies already approved the deal, although the cash tender offer of $1.35 per share for all outstanding Nanosphere shares is subject to approval by Nanosphere shareholders. Additionally, Luminex will also pay off approximately $25 million in Nanosphere debt.