QIAGEN Agrees to Acquire China-Based Shenzhen PG Biotech Co. Ltd.
QIAGEN to become a Leading Supplier of Molecular Diagnostics Products in China
VENLO, The Netherlands, September 26, 2005 - QIAGEN N.V. (Nasdaq: QGEN; Frankfurt, Prime Standard: QIA), the world's leading provider of innovative enabling technologies and products for the separation, purification and handling of nucleic acids and proteins today announced that it has entered into an agreement to purchase all outstanding shares of Shenzhen PG Biotech Co Ltd (PG Biotech) based in Shenzhen, China. PG Biotech is a leading developer, manufacturer and supplier of polymerase chain reaction (PCR)-based molecular diagnostic kits in China. The acquisition will expand QIAGEN's position as a leading provider of molecular diagnostics solutions to OEM partners and customers in the rapidly growing Asian markets. The transaction is currently pending Chinese government approval and subject to customary closing conditions.
Under the terms of the acquisition agreement, QIAGEN will acquire 100% of the outstanding shares of PG Biotech Ltd for approximately US$14.5 million in cash. As 52% of PG Biotech's shares were held by state-owned institutions, QIAGEN's agreement to acquire PG Biotech was the result of a regulated auction process. QIAGEN expects to incur one-time charges of approximately US$0.01 - 0.02 in EPS at closing of this transaction which is subject to government approval and expected to occur in the first half of 2006. Based on preliminary analyses and depending on the date of the closing, QIAGEN expects this transaction to contribute approximately US$6 - 7 million in sales over a period of 12 months and to be neutral in EPS in 2006 and accretive in 2007. Additional financial information will be made available following the closing of the transaction. PG Biotech currently employs approximately 120 employees, of which a substantial number are employed in research and development.
QIAGEN believes that the acquisition of PG Biotech will represent a superb fit with QIAGEN's molecular diagnostics business which is now expected to record sales of over US$ 100 million in 2006. The business profile of PG Biotech is comparable to that of the recently acquired artus GmbH (now QIAGEN Hamburg GmbH) with the difference that PG Biotech has a focus on solutions targeting the Asian markets.
PG Biotech is a leader in providing high-quality, PCR-based molecular diagnostic assays (tests) in China. It has built a substantial development, manufacturing and marketing presence in China and is one of the select companies which have received approvals for more than 10 PCR-based molecular diagnostic assays by the Chinese State Food and Drug Administration (SFDA). Its product portfolio spans over a number of key assays including approved assays for detection of a variety of viral and bacterial pathogens such as SARS, HBV, HPV, Mycobacterium tuberculosis, Neisseria and Chlamydia. The portfolio also includes select assays for applied testing applications such as import/export controls and quarantine testing and a strong pipeline of complete panels for certain disease profiles. PG Biotech has established the first GMP (Good Manufacturing Practices) manufacturing plant certified by the SFDA for in vitro diagnostic products in China. PG Biotech also maintains a very active network of relationships with academic and industrial partners to identify further opportunities to develop new diagnostic tests.
"QIAGEN is a leader in combined preanalytical solutions & assays in molecular diagnostics and research," said Peer M. Schatz, QIAGEN's Chief Executive Officer. "Our solutions enable nucleic acid testing to achieve unmatched performance and regulatory compliance and can be used on a number of leading detection instruments. PG Biotech's expertise in developing, manufacturing and marketing diagnostic assays has the potential to significantly expand QIAGEN's leadership position in providing molecular diagnostics solutions to our partners and customers in Asia."
"Over the course of 2005, we have significantly expanded QIAGEN's position in China," he continued. "We established a focused, local marketing presence including an office in Shanghai and strengthened our distribution channels with Gene Company as our major distributor. The acquisition of Beijing-based TianWei Times provided a network and a base from which we can address the specific local needs of the research community. With the acquisition of PG Biotech, QIAGEN will add a substantial sales channel as well as an assay development and regulatory expertise base for the expansion of our molecular diagnostics activities in this rapidly growing market."
"PG Biotech was sought due to its track record as a leading supplier for nucleic acid-based diagnostic products," said Noel Doheny, QIAGEN's Vice President for Solutions for Molecular Diagnostics. "PG Biotech's leading position in China is based on a group of excellent people and a strong network of relationships in the scientific community as well as on their focused, already well established and rapidly growing presence in this fast developing market."
"We are very pleased and excited at the prospect of joining forces with QIAGEN - one of the world's leading molecular diagnostics companies. We are convinced that this acquisition has the potential to leverage our opportunities to further increase our technology and market leadership in China," said Du Zhan, PG Biotech's CEO. "QIAGEN's global presence, its recognized excellence and its operational strength make QIAGEN a perfect partner to serve the expanding, Chinese diagnostic markets."
Highlights of the Acquisition:
- Accretive transaction with a potential to add continued and rapid growth in QIAGEN's core focus area (preanalytical and assay solutions for molecular diagnostics).
- Substantial market presence in molecular diagnostics in China.
- Leading portfolio of regulated assays.
- Modern, efficient, high-technology and high-quality infrastructure.
- Strong development and manufacturing base to create solutions to be marketed by QIAGEN partners.
- Substantial increase of QIAGEN's value for clients in the Chinese molecular diagnostics industry through the offering of the combination of preanalytical sample preparation and assay technologies.
- PG Biotech's portfolio of diagnostic assays is highly synergistic and complementary to the panels, developed by the recently acquired artus (now QIAGEN)
- Highly synergistic with QIAGEN's technology and product portfolio in PCR reagents and solutions.
QIAGEN N.V., a Netherlands holding company with subsidiaries in Germany, the United States, China, Japan, the United Kingdom, Switzerland, France, Italy, Australia, Norway, Austria, Canada, Sweden, and the Netherlands believes it is the world's leading provider of innovative enabling technologies and products for the separation, purification and handling of nucleic acids and proteins. QIAGEN has developed a comprehensive portfolio of more than 320 proprietary, consumable products for nucleic acid and protein separation, purification and handling, nucleic acid amplification, as well as automated instrumentation, synthetic nucleic acid products and related services. QIAGEN's products are sold in more than 42 countries throughout the world to academic research markets and to leading pharmaceutical and biotechnology companies. In addition, QIAGEN is positioning its products for sale into developing commercial markets, including applied testing markets, clinical research, nucleic acid-based molecular diagnostics, and genetic vaccination and gene therapy. QIAGEN employs more than 1,500 people worldwide. Further information on QIAGEN can be found at http://www.qiagen.com/.
About Shenzen PG Biotech Co Ltd:
Shenzen-based PG Biotech was founded in 1998 by Wensi Zhu, Ph.D., a former scientist at the US National Institutes of Health (NIH), and currently employs approximately 120 employees. The company is focused on providing solutions for the detection of viral and bacterial infectious diseases. PG Biotech maintains a strong network of relationships with top-ranked business partners in the fields of molecular biology, immunology, cell biology and in vitro diagnostics (IVD), as well as in the Chinese scientific community. In the past few years, the company has formed an efficient sales and marketing management network system serving the Life Science researchers and Healthcare professionals in more than 10 locations all around China. Further information on PG Biotech Ltd can be found at www.szpg.com/en/info/company_info.htm.
Certain of the statements contained in this news release may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. To the extent that any of the statements contained herein relating to QIAGEN's products, markets, strategy or operating results are forward-looking, such statements are based on current expectations that involve a number of uncertainties and risks. Such uncertainties and risks include, but are not limited to, risks associated with obtaining government approval of the proposed acquisition, management of growth and international operations (including the effects of currency fluctuations and risks of dependency on logistics), variability of operating results, the commercial development of the applied testing markets, clinical research markets and proteomics markets, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for QIAGEN's, products (including fluctuations due to the level and timing of customers' funding, budgets, and other factors), difficulties in successfully adapting QIAGEN's products to integrated solutions and producing such products, the ability of QIAGEN to identify and develop new products and to differentiate its products from competitors' products, market acceptance of QIAGEN's new products and the integration of acquisitions of technologies and businesses. For further information, refer to the discussions in reports that QIAGEN has filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC).
Peer M. Schatz
Chief Executive Officer
Phone: +49 2103 29 11702
Email: : peer.schatz@QIAGEN.com
Dr. Solveigh Mähler
Director Investor Relations
Phone: +49 2103 29 11710
Email: : solveigh.maehler@QIAGEN.com