Terumo of Japan Agrees to Acquire Caridian From Gambro for $2.63 Billion
Terumo Corp. (4543), Japan’s largest medical device maker, agreed to buy Gambro AB’s CaridianBCT unit for $2.63 billion, including debt, to become the world’s biggest maker of blood-transfusion equipment.
The purchase price is about 15 times CaridianBCT’s 2010 earnings before interest, taxes, depreciation and amortization, the companies said in a statement to the Tokyo Stock Exchange today. Terumo will fund the acquisition with cash and bank loans, the Tokyo-based company said.
CaridianBCT, based in Lakewood, Colorado, makes machines that collect blood components and filter pathogens, and are used by blood banks and hospitals. Buying the unit will boost annual sales by about 70 billion yen ($851 million) and add customers in North America, Terumo said.
“The increasing number of cancer patients in the aging populations of the developed world will increase the demand for platelet transfusion,” the company said in a statement on its website. Terumo is aiming for at least 10 percent annual growth in sales from its blood business, Koji Nakao, an executive vice president, told reporters in Tokyo today.
The announcement was made after markets in Japan closed. Terumo fell 1.8 percent to 4,495 yen on the Tokyo exchange at the 3 p.m. close. The benchmark Topix index slid 1.5 percent.
Gambro, jointly controlled by Investor AB (INVEA) and EQT IV, will have net debt of 7.6 billion Swedish kronor ($1.2 billion) once the deal is completed, based on Dec. 31 levels, the company said. Shares of Stockholm-based Investor, the Wallenberg family’s publicly traded holding company, rose 2.7 percent to 147.1 kronor at 11:17 a.m. in Swedish trading.
The yen, up almost 10 percent against the dollar in the past 12 months, is bolstering the buying power of Japanese companies scouting for U.S. and European targets. Daiichi Sankyo Co. said last week it’s buying Berkley, California-based Plexxikon Inc. for as much as $935 million. Kyowa Hakko Kirin Co. announced plans to buy ProStrakan Group Plc for 292 million pounds ($475 million) the previous week.
Terumo, which had group revenue of 316 billion yen in the ended March 2010, expects to complete the acquisition by early May, and said it will add to earnings by the end of March 2012.
The acquisition will make Terumo the world’s biggest maker of blood transfusion equipment, overtaking Haemonetics Corp. (HAE) of Braintree, Massachusetts, Terumo said in an e-mailed response to questions from Bloomberg News.
Sales from the blood transfusion business will rise to 18 percent of total revenue from about 8 percent now as a result of the purchase, Terumo said. That will help it reach a goal of generating 1 trillion yen of sales within 10 years, it said.
Terumo’s transfusion division sells mainly low-tech products such as blood bags, blood filters and aphaeresis systems that are used to separate blood components, said Stephen Barker, a health-care analyst with MF Global FXA Securities Ltd. in Tokyo, in a January report.
CaridianBCT’s annual sales have expanded an average of 12 percent since 2000, and reached $524 million last year, with Ebitda of $182 million, Terumo said. Today’s transaction price compares with the median of 15.8 times Ebitda of 26 acquisitions of health-care product companies worldwide during the past year, according to data compiled by Bloomberg.
Terumo had 66.7 billion yen in cash and deposits as of Dec. 31, it said in January.
The company was established in 1921 by a group of doctors seeking to make Japan’s first locally produced thermometers, and derives more than half its revenue from the domestic market, Barker said.
Goldman Sachs Group Inc. and Shearman & Sterling LLP are advising Gambro owners Investor and EQT IV. Evercore Partners Inc., Mizuho Financial Group Inc., and Morrison & Foerster LLP are advising Terumo.
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