Luminex Buys MilliporeSigma's Flow Cytometry Unit for $75M

In a bid to enhance portfolio of flow-based detection, Luminex Corporation LMNX recently announced the acquisition of MilliporeSigma's flow cytometry portfolio. The deal, announced earlier in October 2018, has a net worth of $75 million in combined stock, asset and inventory purchases.

However, share prices of Luminex plummeted 21.3% to close at $22.69 since the announcement of the deal. In fact, shares of Luminex declined 21% in three months’ time compared with the industry’s fall of 14.4%. Luminex has a Zacks Rank #3 (Hold).

What is Flow Cytometry?

Flow cytometry is an exclusive laser-based technology in life sciences that is used to detect and measure physical and chemical characteristics of a population of cells or particles. Per Markets And Markets, the global flow cytometry market is expected to reach $4.79 billion by 2022, at a CAGR of 7.8%. MedTech behemoth Bio-Rad Laboratories BIO offers the high-sensitivity S3e Cell Sorter to support flow cytometric experiments.

Strong prospects in the broader market are expected to enhance Luminex’s customer base and boost the top line in the long haul.

How Will The Deal Benefit Luminex?

The buyout is expected to contribute $40-$50 million to revenues in 2019. Further, this will expand Luminex’s direct interactions with researchers conducting cellular analysis.

Luminex will also leverage on MilliporeSigma's flow cytometry portfolio’s exclusive solutions like Amnis and the Guava. For investors’ notice, Amnis is the market-leading solution for imaging flow cytometry products for cell-based analysis. The Guava portfolio of products includes economical and high-performance systems based on microcapillary technologies.

The Amnis unit is a significant contributor to MilliporeSigma's top line, growing in double digit numbers year over year. Reports suggest that MilliporeSigma is also planning to launch a new product and revamp the Guava product line. All these developments are likely to boost Luminex’s product portfolio.

Other Major Acquisitions at a Glance

Recently, Luminex acquired Nanosphere Inc that is likely to enable Luminex to utilize Nanosphere’s high-end protein testing technology and expand customer base. A diverse product portfolio will help Luminex combat industry challenges and enable penetration in the molecular microbiology and diagnostic markets. Furthermore, the company also entered into collaboration with Sutter Health, a non-profit health system in California.

Previously, the company announced the signing of a new supply and distribution agreement with Bio-Techne Corp through 2020. The partnership deal involves immunoassay development and commercialization of Bio-Techne biological content using the Luminex testing platform. Further, under the agreement, Bio-Techne will distribute Luminex multiplexing instrumentation, including the Luminex 200, FLEXMAP 3D and MAGPIX platforms in major global markets.

Stocks to Consider

Some better-ranked stocks in the broader medical space are Veeva Systems Inc VEEV and OPKO Health, Inc OPK.

Veeva Systems’ long-term earnings growth rate is projected at 19.5%. The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

OPKO Health’s long-term earnings growth rate is projected at 12%. The stock presently sports a Zacks Rank of 1.