UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 29, 2019
MERIDIAN BIOSCIENCE, INC.
(Exact Name of Registrant as Specified in Charter)
Ohio | 0-14902 | 31-0888197 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
3471 River Hills Drive, Cincinnati, Ohio |
45244 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (513) 271-3700
(Former Name or Former Address, if Changed Since Last Report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Common Stock, no par value | VIVO | NASDAQ |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Item 1.01. | Entry into a Material Definitive Agreement. |
Effective April 29, 2019, Meridian Bioscience, Inc., an Ohio corporation (Meridian or the Company), Meridian Bioscience Canada Inc., a corporation incorporated under the laws of British Columbia and a direct wholly-owned subsidiary of the Company (Buyer), GenePoc Inc., a corporation incorporated under the laws of Canada (Seller), the shareholders of Seller (the Shareholders), and Après-demain Holding SA, solely in the capacity of Shareholders Representative (the Shareholders Representative), entered into a share purchase agreement (the Purchase Agreement). The Purchase Agreement provides that Buyer will purchase substantially all of the assets and certain specified liabilities of Seller by means of a two-step transaction (the Acquisition). As the first step in the Acquisition, Seller will transfer substantially all of the assets of Seller and certain specified liabilities to GenePoc Canada Inc., a corporation incorporated under the laws of British Columbia and subsidiary of Buyer (GenePoc Canada), in exchange for the issuance to Seller by GenePoc Canada of non-voting Class B shares (the Purchased Shares) of GenePoc Canada (the Reorganization). Then, following the Reorganization, Buyer will acquire from Seller the Purchased Shares, and GenePoc Canada will become Buyers wholly-owned subsidiary, with Buyer owning all of the issued and outstanding shares of GenePoc Canada. The Purchase Agreement contemplates a maximum purchase price of up to $120 million comprised of: (i) a closing cash payment of approximately $50 million subject to a working capital adjustment and holdback of $5 million to secure Sellers performance of certain post-closing obligations; (ii) a $20 million aggregate principal amount non-interest bearing term promissory note (the Promissory Note) payable in two $10 million installments upon the achievement of certain development milestones if achieved by September 30, 2020 and March 31, 2021, respectively; and (iii) a contingent consideration payment of up to $50 million payable if certain financial performance targets are achieved during the twelve-month period ending September 30, 2022. Under the terms of the Purchase Agreement, Meridian and the Shareholders are bound to guaranteeing the obligations of Buyer and Seller, respectively.
The closing of the Acquisition is subject to customary conditions, including, but not limited to: (i) obtaining all material consents and assignments necessary in connection with the Reorganization and the Acquisition; and (ii) Buyer having obtained financing necessary to fulfill its obligations under the Purchase Agreement on terms and conditions satisfactory to Buyer.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to and qualified in its entirety by reference to the Purchase Agreement, a copy of which will be filed with a subsequent report and the terms of which are incorporated herein by reference.
This summary of the Purchase Agreement is included solely to provide investors with information regarding certain terms of the Purchase Agreement. It is not intended to provide factual information about the parties or any of their respective subsidiaries or affiliates. Investors are cautioned that the representations, warranties and covenants included in the Purchase Agreement were made by the parties thereto to each other. These representations, warranties and covenants were made as of specific dates and only for purposes of the Purchase Agreement and are subject to important exceptions and limitations, including a contractual standard of
materiality that may be different from that generally relevant to investors and are qualified by information disclosed in the Companys public filings, as well as in confidential disclosure schedules that the parties exchanged in connection with the execution of the Purchase Agreement. In addition, the representations and warranties may have been included in the Purchase Agreement for the purpose of allocating risk between Seller and Buyer rather than to establish matters as facts. The representations and warranties contained in the Purchase Agreement are solely for the benefit of the parties to the Purchase Agreement. Investors are not third-party beneficiaries under the Purchase Agreement and in reviewing the representations, warranties and covenants contained in the Purchase Agreement or any descriptions thereof in this summary, it is important to bear in mind that such representations, warranties and covenants or any descriptions were not intended by the parties to the Purchase Agreement to be characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Companys public disclosures. For the foregoing reasons, the representations, warranties and covenants or any descriptions of those provisions should not be read alone and should instead be read in conjunction with the other information contained in the reports, statements and filings that the Company publicly files with the SEC.
Item 7.01. | Regulation FD Disclosure. |
On April 30, 2019, the Company issued a press release announcing the Purchase Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information contained in Item 7.01 to this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the Exchange Act), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing by the Company under the Exchange Act.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed acquisition of the business of GenePOC by Meridian, including any statements regarding the synergies, benefits and opportunities of the transaction, future opportunities for the combined company and products, future financial performance and any other statements regarding future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are forward-looking statements made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words anticipate, believe, ensure, expect, if, intend, estimate, probable, project, forecasts, predict, outlook, aim, will, could, should, would, potential, may, might, anticipate, likely, plan, positioned, strategy, and similar expressions, and the negative thereof, are intended to identify forward-looking statements.
All forward-looking information is subject to numerous risks and uncertainties, many of which are beyond the control of Meridian, that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: the diversion of management time on transaction-related issues; ability to successfully integrate the businesses; risk that the transaction and its announcement could have an adverse effect on the parties ability to retain customers and retain and hire key personnel; the risk that any potential synergies from the transaction may not be fully realized or may take longer to realize than expected; and risks inherent in funding, developing and obtaining regulatory approvals of new, commercially-viable and competitive products. In addition, forward-looking statements may also be adversely affected by general market factors, competitive product development, product availability, federal and state regulations and legislation, the regulatory process for new products and indications, manufacturing issues that may arise, patent positions and litigation, among other factors. The forward-looking statements contained in this communication may become outdated over time. Meridian does not assume any responsibility for updating any forward-looking statements. Additional information concerning these and other factors can be found in Meridians filings with the SEC and available through the SECs Electronic Data Gathering and Analysis Retrieval system at www.sec.gov, including Meridians most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The foregoing list of important factors is not exclusive. Meridian assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as may be required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 | Press Release dated April 30, 2019 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MERIDIAN BIOSCIENCE, INC. | ||||||
Date: April 30, 2019 | By: /s/ Eric S. Rasmussen | |||||
Executive Vice President and Chief Financial Officer | ||||||
(Principal Financial Officer) |
Exhibit 99.1
For Immediate Release
MERIDIAN BIOSCIENCE ANNOUNCES AGREEMENT TO ACQUIRE BUSINESS OF GENEPOC; ADDS STATE-OF-THE-ART MOLECULAR DIAGNOSTICS PLATFORM
CINCINNATI, OHIO April 30, 2019 (GLOBE NEWSWIRE) Meridian Bioscience, Inc. (NASDAQ: VIVO), a provider of diagnostic testing solutions and life science raw materials, today announced it has entered into a definitive agreement to acquire the business of GenePOC Inc., a Quebec City, Quebec, Canada based provider of molecular diagnostic instruments and assays. Founded in 2007, GenePOC has approximately 100 employees and generated total revenues of less than $1 million in calendar 2018. Meridian has agreed to make a cash payment at closing of the transaction of $50 million with future payments totaling up to an additional $70 million contingent upon the successful achievement of certain technical development milestones and sales thresholds.
Strategic Fit and Rationale
With the acquisition, Meridian will be getting GenePOCs state-of-the art revogeneTM molecular diagnostics platform, which offers sample to result testing for single tests, as well as flexible multiplexing capability. The Company believes revogeneTM is a perfect fit with Meridians stated strategy to provide gastrointestinal disease and core respiratory illness diagnostics solutions for the diverse needs of complex medical health systems. revogeneTM is an FDA-cleared platform that currently has three FDA-cleared assays, including C. difficile, Group A Strep, and Group B Strep. Those three assays comprise a vast majority of Meridians current total molecular diagnostics sales, thus enabling it to immediately offer this new platform and technology to existing customers seeking better workflow and less hands-on time than Meridians current AlethiaTM molecular platform can provide. Over time, through its multiplexing capability, revogeneTM is expected to allow Meridian to also offer its customers smart panel solutions currently in development and planning.
Jack Kenny, Chief Executive Officer, commented, We are very excited to be adding the GenePOC technology and team to Meridian. GenePOC provides an exciting new state-of-the-art molecular diagnostics platform to our Diagnostics portfolio. This is a critical element of our strategy to re-position our Diagnostics business for sustainable long-term growth. GenePOCs revogeneTM platform is an excellent fit for our customers and strategy to offer gastrointestinal-focused and other targeted diagnostic solutions to meet the diverse needs of todays more complex health care system. We welcome the GenePOC team to the Meridian family and look forward to leveraging Meridians strong and established commercial infrastructure to offer revogeneTM and its menu of assays to our current and new customers.
Summary Transaction Terms and Impact
The cash-free/debt-free purchase price has a maximum potential value of $120 million, with $50 million to be paid at closing (subject to a holdback and working capital adjustment), subsequent payments of up to $20 million in Meridians fiscal 2021 based on the achievement of certain technical development milestones, and a final payment of up to $50 million in fiscal 2023 based on both the sales performance of certain molecular assays and their achievement of minimum profit margin thresholds.
Excluding amortization expense, the Company expects the transaction to add approximately $4 - $5 million in operating expenses in fiscal 2019 and $9 - $10 million in fiscal 2020, both net of planned cost synergies. R&D Teams in both Quebec City and Cincinnati will continue and ramp up work to develop new assays for revogeneTM and meaningfully expand the menu of product offerings. As a result, the Company expects R&D expense in the Diagnostics business to increase to the mid-teens as a percent of sales. The Company expects the transaction to provide a net positive contribution to run rate molecular sales and Company EBITDA starting in fiscal 2021.
The transaction is subject to certain closing conditions of a transaction of this nature. PNC Bank has committed financing and will lead with Fifth Third Bank a transaction for a new $125 million revolving line of credit to finance the acquisition and re-finance Meridians current outstanding debt. The acquisition will also be financed with cash. The Company expects the transaction to close no later than early fourth quarter of fiscal 2019.
Conference Call
Meridian is holding a conference call at 10:00 a.m. Eastern Time today to review the transaction and answer questions, as well as report its fiscal second quarter results. To participate in the live call by telephone from the U.S., dial (866) 443-5802, or from outside the U.S., dial (513) 360-6924, and enter the audience pass code 3893028. A replay will be available for 14 days beginning at 1:00 p.m. Eastern Time on April 30, 2019 by dialing (855) 859-2056 or (404) 537-3406 and entering pass code 3893028.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this communication regarding the proposed acquisition of the business of GenePOC by Meridian, including any statements regarding the synergies, benefits and opportunities of the transaction, future opportunities for the combined company and products, future financial performance and any other statements regarding Meridians future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are forward-looking statements made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words anticipate, believe, ensure, expect, if, intend, estimate, probable, project, forecasts, predict, outlook, aim, will, could, should, would, potential, may, might, anticipate, likely, plan, positioned, strategy, and similar expressions, and the negative thereof, are intended to identify forward-looking statements.
All forward-looking information is subject to numerous risks and uncertainties, many of which are beyond the control of Meridian, that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: the diversion of management time on transaction-related issues; ability to successfully integrate the businesses; risk that the transaction and its announcement could have an adverse effect on the parties ability to retain customers and retain and hire key personnel; the risk that any potential synergies from the transaction may not be fully realized or may take longer to realize than expected; and risks inherent in funding, developing and obtaining regulatory approvals of new, commercially-viable and competitive products. In addition, forward-looking statements may also be adversely affected by general market factors, competitive product development, product availability, federal and state regulations and legislation, the regulatory process for new products and indications, manufacturing issues that may arise, patent positions and litigation, among other factors. The forward-looking statements contained in this communication may become outdated over time. Meridian does not assume any responsibility for updating any forward-looking statements. Additional information concerning these and other factors can be found in Meridians filings with the SEC and available through the SECs Electronic Data Gathering and Analysis Retrieval system at www.sec.gov, including Meridians most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The foregoing list of important factors is not exclusive. Meridian assumes no obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, except as may be required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
About Meridian Bioscience, Inc.
Meridian is a fully integrated life science company that develops, manufactures, markets and distributes a broad range of innovative diagnostic products. We are dedicated to developing and delivering better solutions that give answers with speed, accuracy and simplicity that are redefining the possibilities of life from discovery to diagnosis. Through discovery and development, we provide critical life science raw materials used in immunological and molecular tests for human, animal, plant, and environmental applications. Through diagnosis, we provide diagnostic solutions in areas including gastrointestinal and upper respiratory infections and blood lead level testing. We build relationships and provide solutions to hospitals, reference laboratories, research centers, veterinary testing centers, physician offices, diagnostics manufacturers, and biotech companies in more than 70 countries around the world.
Meridians shares are traded on the NASDAQ Global Select Market, symbol VIVO. Meridians website address is www.meridianbioscience.com.
Contact:
Jack Kenny
Chief Executive Officer
Meridian Bioscience, Inc.
Phone: 513.271.3700
Email: mbi@meridianbioscience.com
###
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