Early yesterday, contract research organization (CRO) Charles River Laboratories announced they had entered into an agreement to acquire WIL Research for an estimated $585 million. WIL Research is a contract development and manufacturing organization (CDMO) which offers additional safety assessment services to biopharmaceutical, agricultural and chemical companies on a worldwide scale.
“In addition to meeting our disciplined acquisition criteria, WIL Research is an exceptional strategic fit for Charles River because it incorporates the key attributes we require in an acquisition: high-quality services, scientific expertise, complementary capabilities, and access to growing end markets,” said James C. Foster, Chairman, President, and Chief Executive Officer of Charles River Laboratories. “The acquisition will also expand our geographic footprint, particularly in continental Europe, providing needed capacity to meet current and future demand and enabling Charles River to provide a broader range of services proximate to our global clients.”
In a press release detailing the acquisition, Charles River elaborates on four areas of value that provide the basis of the strategic rationale behind their decision to secure WIL Research. Charles River maintains that WIL Research will help the CRO build their global scale by providing safety assessment services to a global client base.
WIL Research will also provide opportunity for Charles River to expand their client base, especially in the fast-growing biotechnology sector. The acquisition will act to diversify Charles River’s portfolio, by allowing them to offer additional services – including CDMO, safety assessment and bioanalysis – to biopharmaceutical clients in the early stages of drug research and development.
Finally, Charles River expects a boost to its financial growth profile as a result of the acquisition. WIL Research is expected to report its annual revenue from 2015 as $215 million; this figure represents a 9 percent increase over revenue numbers for 2014.
“In addition to enhancing our value proposition for clients, we believe that the acquisition of WIL Research will generate value for shareholders, driving profitable revenue growth and non-GAAP earnings per share accretion of at least $0.20 in 2016 and $0.45 to $0.50 in 2017,” said Foster. “We greatly respect WIL Research’s employees, its scientific capabilities, and the reputation it has built over 40 years since its founding, and look forward to welcoming WIL Research to the Charles River family.” The acquisition is positioned to close in the beginning of the second quarter of 2016.
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