Publicly traded PerkinElmer has closed the sale of its applied, food and enterprise services businesses (AFES) to New Mountain Capital. Back in August 2022, the two parties struck an agreement for the sale of AFES for up to $2.45 billion in cash.
PerkinElmer (NYSE: PKI) is a provider of products and services used by scientists, researchers and clinicians to diagnose diseases, discover new drugs, monitor the safety and quality of food, and analyze environmental factors. In FY 2022, PerkinElmer had revenues of approximately $4.6 billion and operated through two segments, Discovery & Analytical Solutions (reagents, informatics, detection and imaging technologies) and Diagnostics (instruments, reagents, and software products to detect genetic disorders and infectious disease testing). PerkinElmer was founded in 1937 and is headquartered in Waltham, Massachusetts.
The AFES group operated within PerkinElmer’s Discovery & Analytical Solutions segment and employed approximately 6,000 of PerkinElmer’s nearly 17,000 employees.
The AFES businesses include PerkinElmer’s OneSource laboratory and field services (instrument service and repair, asset procurement and disposition, compliance and calibration, and laboratory relocation), along with a portfolio of atomic spectroscopy, molecular spectroscopy, and chromatography instruments, consumables and reagents that are used in the biopharma, food, environmental and safety markets.
With the sale of AFES completed, PerkinElmer now operates through two business segments, Life Sciences and Diagnostics. Together these two segments provide reagents, assays, instruments, automation, informatics and related services to commercial, government, academic and healthcare customers, and in FY2022 had combined revenues of approximately $3.3 billion.
According to PerkinElmer, the AFES businesses had a combined $1.3 billion of estimated 2022 revenue and operate with a low-to-mid-teens adjusted EBITDA margin. Assuming a 12.5% adjusted EBITDA margin and a purchase price of $2.45 billion, this equals a valuation multiple of 15.1x. Click HERE to view a copy of PerkinElmer’s investor presentation on the sale of AFES.
With the closing of the sale, the PerkinElmer name and brand will be retained by AFES and, before the end of the second quarter, PerkinElmer will rebrand itself under a new corporate name.
“Today marks the culmination of the hard work and dedication from PerkinElmer teams around the world to ensure that both new companies are in a position to succeed on day one,” said Prahlad Singh, president and chief executive officer of the PerkinElmer Life Sciences and Diagnostics company. “As we look ahead, our new Life Sciences and Diagnostics organization has an immense opportunity to continue to lead with science to redefine human health. I’m looking forward to sharing our new name and brand in the near future.”
“We would like to thank the entire team at PerkinElmer for all the hard work to get to today’s closing,” said Andre Moura, a managing director at New Mountain. “We look forward to partnering with the new PerkinElmer business New Mountain acquired to drive continued growth and innovation for the benefit of all stakeholders including the company’s customers, employees and other business partners.”
New Mountain is an industry generalist and invests between $100 million and $500 million per transaction in companies with enterprise values typically between $100 million and $1 billion. The firm, founded in 2000 and headquartered in New York City, manages over $37 billion in aggregate assets in private equity, credit, net lease real estate and public equity funds.
In January 2021, New Mountain closed its newest flagship fund, New Mountain Partners VI LP, with $9.6 billion of capital, and the firm’s first non-control private equity fund, Strategic Equity Fund I LP, with $640 million of capital.
New Mountain Capital was advised by Jefferies, and Goldman Sachs advised PerkinElmer. Owl Rock Capital, a division of Blue Owl, was the administrative agent and joint lead arranger for the credit facilities used to support New Mountain’s buy of AFES.
© 2023 Private Equity Professional | March 16, 2023
