The U.K.'s Cyprotex has picked up Michigan-based competitor CeeTox in a deal worth up to $5.1 million, boosting its offerings in in vitro testing and expanding into cosmetics and personal care.
Under the deal, Cyprotex will hand over about $1 million up front and then pay out as much as 5% of net sales over the next four years with the total price not to exceed $5.1 million.
Both CROs specialize in toxicology testing, but while Cyprotex's client roster is mostly made up of biotech and pharma outfits, CeeTox's share of the consumer testing market gives its acquirer the chance to diversify revenue, Cyprotex CEO Anthony Baxter said.
"Principally, it enables the company to offer a more complete assay and screening service to the cosmetics and personal care industry, already an expanding customer segment, and will materially extend the company's footprint in its established core pharmaceutical and agrochemical industry markets," Baxter said in a statement. "The innovative assays and screens that CeeTox has developed over its 10-year life are complementary to our existing comprehensive platform."
CeeTox posted about $3.8 million in sales last year, swinging to a $1.5 million operating loss, according to Cyprotex, which expects its acquisition to be earnings-neutral in the first year.
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