In an all-cash deal that could be worth up to $22.7 million, Eden Prairie, MN-based SurModics, which provides surface-modification and drug-delivery technologies to medical-device and pharmaceutical firms, has acquired a company that will expand its offering to clients developing diagnostic tests.
SurModics will pay $11.3 million at closing and up to an additional $11.4 million at specified revenue targets for BioFX Laboratories, an Owings Mills, MD, manufacturer of substrates, which detect and signal that a reaction has taken place.
“The acquisition of BioFX Laboratories allows us to broaden our product and technology offerings in the important and growing in vitro diagnostics market,” said Bruce Barclay, CEO of SurModics, in a statement.
BioFX offers both colorimetric and chemiluminescent substrates, as well as other products for use in in vitro diagnostic tests, a market estimated to exceed $20 billion.
“Our In Vitro Technologies business unit allows us to participate in the healthcare industry without some of the regulatory and other requirements present in our other business units,” explained Barclay. He noted that the unit currently accounts for approximately 30% of SurModics’ total revenue.
BioFX generated sales of $3.5 million in 2006, a 16% increase from the previous year. The profitable and cash-flow positive company will operate within SurModics’ In Vitro Technologies business unit following the acquisition, which is expected to be accretive to SurModics’ fiscal 2008 earnings.