Neogen Corporation (Nasdaq: NEOG) has entered into a letter of intent to acquire QA Life Sciences, Inc. of San Diego, Calif. The purchase is subject to due diligence and approval of Neogen’s Board of Directors, and is expected to be completed in less than 60 days.
QA Life Sciences is a niche player in the foodborne bacteria testing market with unique, established technology that complements Neogen’s comprehensive food safety product offerings. QA’s sales were less than $1.0 million in its last fiscal year. The majority of the company’s products have the distinct competitive advantage of carrying important industry-favored quality approvals from the independent Association of Official Analytical Chemists (AOAC).
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“QA Life Sciences has established an excellent reputation and loyal customer base with a limited marketing effort,” said James Herbert, Neogen’s president. “Integrating QA’s product line into our Food Safety group, with its worldwide sales and marketing strength, will allow us to substantially increase the products’ sales by offering them to our existing customer base. The move also presents gross margin enhancement opportunities, thus presenting both top and bottom line improvements.”
QA Life Sciences markets its ISO-GRID® filter membrane systems, and proprietary culture media, for the rapid detection and enumeration of yeast and mold, coliforms/E. coli, total bacterial count, aerobic plate count, E. coli O157:H7, Salmonella, Listeria monocytogenes and Staphylococcus aureus. The individual products offer numerous competitive advantages over market competitors, including speed and the testing of specific commodities.
Neogen Corporation develops and markets products and services dedicated to food and animal safety. The Company’s Food Safety Division markets diagnostic test kits to detect foodborne bacteria, natural toxins, genetic modifications, food allergens, drug residues, plant diseases and sanitation concerns. Neogen’s Animal Safety Division markets a complete line of diagnostics, veterinary instruments, veterinary pharmaceuticals, nutritional supplements and wound care products.
Certain portions of this news release that do not relate to historical financial information constitute forward-looking statements. These forward- looking statements are subject to certain risks and uncertainties. Actual future results and trends may differ materially from historical results or those expected depending on a variety of factors listed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s most recently filed Form 10-K.
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