BioFire Diagnostics may have agreed to sell itself to French diagnostics giant bioMérieux for $450 million, but the company plans to keep its name and senior management and continue growing at its Salt Lake City, UT, headquarters.
"They are committed to leaving us the way we are going and supporting us," Eric Gorrell, BioFire's general counsel and head of investor relations, told FierceDiagnostics. "We will become their hub, the center of excellence for molecular biology for the entire bioMérieux family."
BioFire's sale to bioMérieux, announced Sept. 3, caps a heady time for BioFire. Just a little over a year ago, BioFire changed its name from Idaho Technology to better encapsulate its molecular diagnostics focus. Since then, the 20-year-old operation has raised $45 million in debt capital from Athyrium Opportunities Fund to help propel the rollout of its FilmArray diagnostic platform, which has an initial respiratory test designed to screen for 20 viruses and bacteria in an hour. BioFire has major expansion plans for the molecular diagnostics platform, with tests in the pipeline for sepsis, diarrhea, meningitis and pneumonia, and it continues to generate serious industry buzz regarding FilmArray and its game-changing potential. The company has also been on a hiring spree, fueled by a $25 million tax credit from the state of Utah. Employment has jumped from 250 to 500-plus over the last two years. The headcount should reach 610 by year end and grow by another 125 people the following year, Gorrell told FierceDiagnostics.
So why sell after all that investment in product and brand building?
"It takes a lot of muscle to compete with a lot of the bigger players out there," Gorrell tells FierceDiagnostics. "To be able to go public well and raise funds is one thing. To be able to go to private equity and raise debt capital is another thing. But to hit the market really hard with a winning product (i.e., FilmArray), you need significant resources."
Gorrell said that BioFire hired J.P. Morgan about a year ago as its exclusive financial adviser, to help the company determine whether an IPO or a sale to a larger entity as a private company would be the best option. The company got courted by bioMérieux early on, Gorrell said, and it made positive impressions from the start.
"It became obvious they were a perfect fit," he said. "Their intention is to infuse a lot of capital and grow us in a way that we couldn't bootstrap. They were first to our table and the agreement is very strong." Among the benefits: BioFire can tap into bioMérieux's 500-person global sales force, a big boost over the 15 to 18 people on which the company currently relies.
The deal includes the $450 million purchase price plus BioFire's net financial debt. If all goes well, the sale should close by the end of the current fiscal year or early 2014. And BioFire will keep its identity and then some.
"They have a history with their companies of leaving [them] intact and keeping their entrepreneurial spirit. They think they have that" with BioFire, Gorrell said. "We will be a bioMérieux company."
- read the release
- here's FierceMedicalDevices' take