Reuters: Market News: UPDATE 2-Corning to boost life sciences unit in Becton deal

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UPDATE 2-Corning to boost life sciences unit in Becton deal Apr 10th 2012, 15:31 Tue Apr 10, 2012 11:31am EDT * Buys Becton, Dickinson unit $730 mln in cash * Deal excludes Becton's bioprocessing platform * Corning's life sciences sales expected to rise 40 pct * Company tries to diversify beyond LCD glass -analyst By Liana B. Baker and Sayantani Ghosh April 10 (Reuters) - Corning Inc will buy the majority of one of Becton, Dickinson & Co's biosciences units for about $730 million, as the glassmaker seeks to boost life sciences sales to make up for its slowing TV glass business. Corning will acquire the unit of Becton, Dickinson that makes lab research instruments such as tubes and Petri dishes. The cash deal will boost annual sales of Corning's life sciences unit by 40 percent, the company said. Corning's management had said during an investor presentation in February that it planned to make acquisitions in its life sciences unit. Its LCD glass unit, its largest and most profitable business, has been lagging as TV sales have slumped globally, hurting glass demand. "It's important that Corning invest in the other segments of its business as its primary growth driver of the last few years, glass for LCD TVs, is hitting a stage of maturity," said Evercore Partners analyst Alkesh Shah. Shah added that Corning's life sciences business makes up about 8 percent of the glassmaker's revenue and that after the acquisition, it will contribute about 10 or 11 percent. Many investors still consider Corning, which competes with LG Display Co Ltd and Asahi Glass Co Ltd, a company largely dependent on the ebb and flow of the LCD market. Demand for LCD panels has slowed across the industry as U.S. consumers show little appetite for upgrading televisions after buying their first flat-screen sets. This has hurt Corning shares, which are down 30 percent over the last 12 months. "The stock is not going to work until the LCD glass part of the business is smaller so there is less risk," Shah said. Chief Financial Officer Jim Flaws said in a statement that the deal will "provide a stable stream of incremental cash flow to Corning as we become a more balanced company." The transaction, expected to be completed later this year, is expected to add slightly to Corning's 2013 earnings. It will add 5 cents a share to Corning's total profit by 2016. Corning will use some of its domestic cash balances to pay for the deal. Corning Chief Executive Wendell Weeks added that the deal will help Corning's life sciences unit become a $1 billion business by 2014. For 2012, the biosciences unit, Discovery Labware, expects a profit of 23 cents to 27 cents a share and revenue of about $235 million. The Discovery Labware unit has headquarters in Billerica, Massachusetts, and also has operations in North Carolina, the United Kingdom, and dealer networks in Asia, Europe and North America. The deal, which excludes Becton's bioprocessing platform, will let Becton's biosciences unit focus on its recent acquisitions and newly launched instrumentation products, it said in a separate statement. Corning shares were up 1 cent at $13.49 and Becton, Dickinson shares were down 0.8 percent at $76.07 on Tuesday morning on the New York Stock Exchange. Link this Share this Digg this Email Reprints

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