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2022-08-03| M&A

PerkinElmer Sells Three of its Businesses for $2.45 Billion

by Reed Slater
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In a massive deal, PerkinElmer Inc. announced that it would sell its Applied, Food, and Enterprise Services businesses to New Mountain Capital to focus on its Life Sciences and Diagnostics businesses. The sale will bring PerkinElmer $2.3 billion upon closing and an additional $150 million when New Mountain reaches certain milestones under ownership. 

What New Mountain Gains to Benefit From the Deal

As part of the agreement, New Mountain will continue operations of the Applied, Food, and Enterprise Services businesses under the PerkinElmer name, which are expected to generate $1.3 billion in 2022. The three businesses account for approximately 6,000 of PerkinElmer’s 17,000 employees. 

The purchase will include PerkinElmer’s OneSource laboratory and field services, a program dedicated to assisting laboratories in optimization, lab analytics, and workflow solutions. New Mountain will also receive specialized laboratory instruments and materials that serve scientific end markets. The two companies plan to close the deal in the first quarter of 2023. 

Managing Director at New Mountain, Andrew Moura, said, “The business we are acquiring provides mission-critical solutions that enable scientists and researchers to perform their important work, including developing and manufacturing biopharmaceuticals, ensuring a cleaner and safer environment and food supply, and helping to provide high-quality products to demanding customers.”

Jefferies served as the exclusive financial advisor to New Mountain, while Goldman Sachs assisted PerkinElmer. Owl Creek Capital served as administrative agent and joint lead arranger for the deal. 

Related Article: Merck Reportedly Interested in Potential $40 Billion SeaGen Buyout

More Room to Focus on Other Endeavors for PerkinElmer

PerkinElmer is joining several other large corporations in restructuring efforts like 3M’s recent healthcare unit spinoff and Labcorp’s clinical business development separation. Its Life Sciences and Diagnostics businesses will be PerkinElmer’s new focus, which will receive a new name and ticker symbol after closing the deal. 

The Life Sciences and Diagnostics businesses will maintain the same senior management team. PerkinElmer says the Life Science and Diagnostics businesses are on track to generate $3.3 billion in 2022, which it hopes to grow in the coming years as a result of the new strategic plan. 

“Today’s announcement is a pivotal step in the significant portfolio transformation we have been executing on over the last several years,” President and CEO of PerkinElmer, Prahlad Singh, said, “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 huge price tag is exciting news for PerkinElmer as it plans to move forward in a newly-focused direction. New Mountain Capital seems keen to keep the ball rolling on the already profitable businesses it plans to acquire

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