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Last updated: July 20, 2008
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Invitrogen Acquires Applied Biosystems

It’s always interesting to speculate on the long-term marketplace ramifications of an acquisition. The recent acquisition of Applied Biosystems by Invitrogen Corporation last June marks Invitrogen’s move to take market leadership in the area of biotechnology reagents and systems.

Invitrogen is hoping that this strategic combination will launch the company into global leadership in the biotechnology market since they expect to generate close to $3.5 billion in combined sales. In addition, the combined markets now give the company a major presence in key growth markets and strong technical capabilities in the areas of genetic analysis, proteomics, cell biology and cell systems. Interestingly, the name for the new combined company will be Applied Biosystems, Inc. although the corporate headquarters will remain at the Invitrogen site in Carlsbad, CA.

The Board of Directors of the new company will be composed of the nine current Invitrogen Board members and three additional members from the current Applera Board. Current Invitrogen Chairman and CEO, Gregory T. Lucier, will remain in that position for the combined company, while Mark P. Stevenson, formerly Applied Biosystems’ President and Chief Operating Officer, will carry on in that position.

"This transaction combines the industry's premier consumables provider with the industry's premier systems provider to create a world-class biotechnology tools company," Lucier claims. "With this acquisition, we are nearly doubling our consumables business as almost half of Applied Biosystems's revenues are consumable in nature. It also provides significant value creating opportunities for customers, shareholders and employees alike."

The press release distributed by Invitrogen about the merger details some of the new company’s expectations, most particularly the strategic and financial benefits of the transaction. These include a focus on the complementary product offerings and how 70 percent of revenue will be generated by consumables and services; the team of experienced employees; the strong platform for expansion into new, high growth markets; the cost savings and operational efficiencies to be achieved by the merger; and the high operating income form revenue synergies the new company expects. Hmmm. Operational efficiencies usually means site consolidation and staff reductions. And, the stated focus is primarily on consumables; software is not mentioned. What does this means for Applied Biosystems’ SQL*LIMS Laboratory Information Management System (LIMS)?

From a LIMS point of view, the acquisition of SQL*LIMS adds a major software solution to Invitrogen’s somewhat scanty software line. Their existing HLA and Vector Design software focus on data analysis and results management -- something that a LIMS does extremely well and which the SQL*LIMS solution does particularly well for drug discovery, biotechnology and pharmaceutical applications. SQL*LIMS was the first LIMS to jump into the genetics marketplace (perhaps a bit too early although their market sense can’t be faulted), and their enthusiasm and attention to that market from its inception, particularly with the Human Genome Project, was instrumental in helping to break the DNA code.

Applera has been looking for a buyer for their Applied Biosystems division for some time, but the deal needed to be sweetened with the rest of the Applied Biosystems product line, particularly those instruments and consumables. Of the many possible suitors Applera has entertained for Applied Biosystems, this one looks to be a really good match. Lucier has a reputation in the industry for smart management and a keen intellect; those in the know think this man will make the right decisions, and take this company to new heights. It will be interesting to see where SQL*LIMS fits into that bigger picture.