US Company 'Meridian' Acquired by SD Biosensor, Opening Path to North American Market

In Vitro Diagnostics Company Meridian
Large-Scale M&A Worth Over 2 Trillion KRW
Expecting Synergy in Production and Distribution Networks

[Asia Economy Reporter Lee Gwan-joo] SD Biosensor, well known for its COVID-19 diagnostic kits, has succeeded in the largest merger and acquisition (M&A) deal in the domestic pharmaceutical and bio industry worth around 2 trillion KRW. This move is being evaluated as securing a continuous growth engine.

On the 8th, SD Biosensor announced that it will acquire the U.S. in vitro diagnostics company Meridian Bioscience for about 2 trillion KRW. SD Biosensor will hold 60% of the shares, and the private equity fund SJL Partners will hold 40%. The two companies will jointly invest in a U.S. corporation, and the subsidiary of this U.S. corporation will merge with Meridian.

Last year, SD Biosensor surpassed leading bio companies such as Samsung Biologics and Celltrion, recording the first pharmaceutical and bio sales of over 2 trillion KRW (2.93 trillion KRW), making it the biggest beneficiary of the COVID-19 pandemic. This year, due to the Omicron variant surge in the first half, sales are expected to reach the 3 trillion KRW range, but to secure sustainable growth beyond a temporary boom, expansion into the global market and business diversification were required.

Having secured sufficient "ammunition," SD Biosensor did not hide its intention for global M&A. At the time of last year's earnings announcement, it revealed active M&A plans, acquiring the German in vitro diagnostics distributor Bestbion for 16.1 billion KRW in March and the Italian in vitro diagnostics distributor Relab for 61.9 billion KRW in April. While the previous M&As were aimed at securing European distribution networks, this Meridian M&A is a complex move to accelerate entry into the North American market, secure production facilities, and strengthen U.S. Food and Drug Administration (FDA) approval capabilities. Industry insiders responded, "Starting with relatively small-scale M&As, this time it is a large-scale M&A that marks a milestone."

Meridian, established in 1976, is an in vitro diagnostics company. It produces immunodiagnostics, molecular diagnostics, respiratory diagnostics, blood diagnostics platforms, as well as raw materials for pharmaceutical and bio products and diagnostic reagents. It is evaluated to have strengths in diagnostic platforms for gastrointestinal infections such as Helicobacter pylori and inflammatory bowel disease bacteria. Currently listed on the Nasdaq Global Select Market (NQGS), its sales last year were $318 million (approximately 410 billion KRW).

In particular, synergy effects in North American production and distribution networks were a major factor in considering the acquisition of Meridian. SD Biosensor’s production bases are in Korea, India, Indonesia, and Brazil, while Meridian’s production bases are in the U.S., Germany, the U.K., and Canada, so there is no overlap. Meridian’s rich experience and specialized personnel in obtaining FDA approvals, having received FDA approval for eight products in the past five years, were also taken into account.

Cho Young-sik, chairman of SD Biosensor, said, "We expect to show the best synergy by cooperating with Meridian’s key management along with SJL Partners," adding, "Through SD Biosensor’s R&D capabilities and mass production know-how, Meridian’s North American sales network and FDA approval capabilities, and SJL Partners’ human resource management expertise, we will become a ‘Top 3’ player in the global point-of-care diagnostics market, including the U.S."

Meanwhile, SD Biosensor will hold an online briefing session at 4 p.m. today regarding this M&A. The briefing will include explanations about the background of the acquisition, an introduction to Meridian, an introduction to SJL Partners who are co-investing, and the synergy effects of the M&A. The online briefing will be conducted via the video conferencing platform Zoom and can be accessed through a popup link on the SD Biosensor website.

This content was produced with the assistance of AI translation services.