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In 2022, Abcam, a Cambridge-based biotech company, made the decision to pursue a US listing instead of a UK listing. However, their plans have taken a different turn. US industrial giant Danaher has recently announced its acquisition of Abcam for $5.7 billion. This strategic move comes as part of Danaher’s expansion strategy, as the company currently holds an enterprise value of $200 billion.
The acquisition was prompted by Abcam founder Jonathan Milner, who voiced his concerns over the company’s underperformance. Milner, who owns 6% of Abcam, called for a shareholder meeting to replace board members and criticized the management for prioritizing their own pay and job security over maximizing shareholder value. Activist investor Starboard Value also exerted pressure on Abcam. As a result, Abcam began exploring potential bids from large life sciences groups.
Abcam had been eyeing American investors, but its share price dropped to less than $13 per share in April. Danaher’s offer of $24 per share represents a significant premium. Though the offer translates to a high multiple of 32 times annual EBITDA, Danaher plans to finance the acquisition with cash and commercial paper. They anticipate a 2% increase in annual earnings per share initially, with synergies eventually reducing a quarter of Abcam’s annual overhead and R&D costs.
Danaher’s share price increased by 2% on the day the acquisition was announced, which is uncommon for the acquiring company. Nevertheless, Danaher is renowned for its successful integration of acquired companies and its ability to generate efficiencies. The deal is expected to be finalized by the middle of next year, marking the end of Milner’s internal battle within Abcam.
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