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CellaVision to acquire RAL Diagnostics

The company has signed an agreement to acquire the French company RAL Diagnostics (RAL), which manufactures sample preparation products in hematology, pathology, cytology and microbiology.

RAL’s sales in 2018 was about SEK 87 million and its EBITDA margin about 15 percent. The cash purchase price is SEK 268 million on a cash and debt-free basis. The acquisition is financed through a combination of CellaVision’s own cash and cash equivalents and bank loans arranged by Skandinaviska Enskilda Banken of SEK 120 million.

Important technology and new know-how

The acquisition of RAL is a natural step in CellaVision’s established strategy, the company states. It gives CellaVision the “ability to further improve the quality of sample preparation, which is of great importance for the result of the blood analysis”. The acquisition gives CellaVision a well-established brand with solutions in staining and sample preparation of the highest quality, the company continues. Both companies operate in hematology, collaborate with the same global partners and have the same end users. Already today, CellaVision’s and RAL’s products are used together by several laboratories and form separate but integrated steps in a complete blood analysis chain.

The acquisition provides CellaVision with important technology and new know-how, which in combination will form a good basis for continued growth, it states.

In addition to RAL’s offering in hematology, a segment amounting to 50 percent, RAL’s product portfolio includes the areas of microbiology, amounting to 40 percent, and cytology and pathology which together amount to ten percent. The acquisition thus opens new future opportunities to apply CellaVision’s technology beyond hematology.

Motives and opportunities

Based on the combined portfolios and potential to standardize the workflow globally, the acquisition is expected to increase CellaVision’s addressable to a total market value of SEK six billion. The acquisition adds new technology in sample preparation and gives CellaVision good control of quality of the blood smears analyzed in the company’s equipment. This means a broadening of CellaVision’s product offer, covering a larger part of the blood analysis chain. Sample preparation primarily consists of consumables, which means that through the acquisition CellaVision gains access to recurring revenues.

RAL holds a strong position in EMEA but has a limited presence in the Americas and APAC, where CellaVision has established a strong position. Thus, there are good opportunities to effective sales expansion for RAL’s solutions in hematology through CellaVision’s organization and established hematology partnerships.

The acquisition of RAL supplies CellaVision with considerable experience and knowledge in microbiology, cytology and pathology, which opens up new opportunities to apply CellaVision’s technology beyond hematology.

“CellaVision and RAL fit very well together”

“I am delighted and proud of the acquisition of RAL. CellaVision and RAL fit very well together strategically and in combination we have the capacity for stronger development than would have been possible as two separate companies. RAL’s hematology range will have access to CellaVision’s strong market organization and thus be able to reach new geographies in the Americas and APAC. For CellaVision the acquisition means that we are broadening our product range while acquiring new and important skills in analysis areas interesting for CellaVision’s future development,” comments CellaVision’s President and CEO Zlatko Rihter.

The acquisition is expected to closed during the fall of 2019.

Estimated financial impact

The estimated total sales for CellaVision and RAL in 2018 amounted to SEK 452 million with an EBITDA result of about SEK 131 million, corresponding to an EBITDA margin of about 29 percent. Through the acquisition CellaVision’s sales in EMEA will grow by more than 90 percent and globally by about 25 percent.

Photo of Zlatko Rihter: CellaVision