Perkin Elmer announced it has entered into an agreement with the intention to divest its Applied, Food and Enterprise Services businesses to New Mountain Capital, a leading growth-oriented private equity firm, for total consideration of $2.45 billion in cash, $2.30 billion of which will be received at the closing and $150 million of which will be payable contingent on the exit valuation New Mountain Capital receives on a sale or other capital events related to the business.
“Following the close of the transaction, we will be a pure-play, high growth, high margin Life Sciences and Diagnostics company with unique scale.”Perkin Elmer
“Today’s announcement is a pivotal step in the significant portfolio transformation we have been executing on over the last several years,” said Prahlad Singh, president and chief executive officer of PerkinElmer. “Following the close of the transaction, we will be a pure-play, high growth, high margin Life Sciences and Diagnostics company with unique scale. The Company’s increased financial strength will support accelerated investment into attractive end markets across science and disease, and drive advanced research, discovery, and improve global health.”
The Company’s business following the close of the transaction will consist of its Life Sciences and Diagnostics businesses. Together, these businesses are expected to generate approximately $3.3 billion of revenue in 2022, approximately 80% of which is recurring. The Company’s revenue is expected to grow over 10% organically per year with top-tier levels of profitability. With the aggressive deleveraging that has already occurred and expected robust cash flows, when combined with the proceeds from the intended divestiture, the Company will be in an even stronger position to build on its track record of value creating capital deployment.
Singh continued, “This milestone has been made possible by the hard work of our nearly 17,000 employees across the globe. It is a validation of our people and the incredible businesses we have built. With this transaction, the Applied, Food and Enterprise Services businesses are gaining a partner who is committed to building on their record of success. Upon closing of the transaction, I believe both organizations will benefit significantly from increased focus and aligned investment on their unique market opportunities.”
The transaction is expected to close in the first quarter of 2023, subject to regulatory approvals and other customary closing conditions.
Upon closing of the transaction, the PerkinElmer name and brand are expected to be retained by the Analytical, Food, and Enterprise Services businesses under its new ownership. The Company’s Life Sciences and Diagnostics businesses will adopt a new name and stock ticker that will be announced at a later date. This science-first Life Sciences and Diagnostics company will continue to be led by the existing PerkinElmer senior management team and will be acutely focused on driving accelerated innovations for customers leading to faster growth, elevated profitability, and a best-in-class financial profile overall.
The Analytical, Food, and Enterprise Services businesses that are intended to be divested are expected to generate approximately $1.3 billion in revenue in 2022 with a low-to-mid teens adjusted EBITDA margin. These businesses include approximately 6,000 of PerkinElmer’s nearly 17,000 current employees.