Last week Pall Corporation completed its $185m (€135m) acquisition of ATMI’s life science business first announced in December 2013. During a conference call yesterday to discuss the firm's second quarter 2014 financial results, CEO Larry Kingsley gave some insight into the integration of ATMI’s single-use capabilities.
“Single-use is growing kind of off the charts,” he told investors, though affirmed “classical large-volume biotech production - the stainless variety - is still growing very nicely, and for that matter, there's going to be a number of hybrid systems for a good while to come.”
He continued: “[With the acquisition of ATMI] we've got the position we need to go after the single-use space, but the large-volume bioprocess applications that are more filtration-centric will be a nice contributor for a very long period of time for us.”
Whilst Kingsley said the addition of ATMI was unlikely to substantially increase the overall business going into fiscal year 2015, he said the acquisition was an important coup in the attractive bioprocessing space which suffers from a relative scarcity of good technology and good assets.
“There's a kind of unique combination here between what Pall brings to the table and what ATMI brings to the table with a very nice complement of products that does give us a very nice position moving forward.”
Pall will be competing with other single-use technology manufacturers, though when questioned on the market share, major customers and where new opportunities for improving lay Kingsley refused to comment in relation to rivals Sartorius and EMD Millipore.
“What we do see now with the advent of more capital flowing into the biotech space, is the need for somebody to do a better job around full systems deployment,” he did tell stakeholders. “This idea of bringing a suite of solutions to the space better than anyone else is what I think is incumbent upon us.”
Integration and Acquisitions
Integration of ATMI’s staff and products has commenced, yet the deal was described by Kingsley as “pretty expensive” and has left Pall slightly in net debt for the quarter.
However, this will not stop Pall scouting for further bolt-on acquisitions and, he said: “While valuations are full and attractive properties are scarce, we believe that we can successfully execute further M&A while remaining disciplined and focused on our key principles.”
“I wouldn't use ATMI as a prototypical acquisition,” he added. “We bring the channel, the sales force, the ability to go global, complementary technology to what they have, but they bring some very strong technology that is recognized throughout the space.”
For the second quarter 2014, sales of Pall’s biopharma systems rose 8% on the same period last year to $218m, and sales for the six months ending January 31 2014 stood at $415m.