ACQUISITION WOULD ENHANCE COMPANY’S PRESENCE IN VETERINARY DIAGNOSTICS
In a move to enhance its presence in a fast-growing segment of the animal health market, Zoetis announced it will acquire Abaxis, a manufacturer of diagnostic instruments for veterinary point-of-care services, for $2 billion. Zoetis expects to complete the acquisition before the end of 2018.
“This acquisition brings Zoetis a company that has a proven, competitive diagnostic platform for growth that we can help to accelerate in the U.S. and worldwide with our global scale and direct customer relationships in approximately 45 countries,” said Juan Ramón Alaix, Chief Executive Officer of Zoetis. “Together we can bring more veterinarian customers a broader range of products that fit into our comprehensive solutions and innovations, from prediction and early detection of disease in animals to prevention and treatment. We are very excited by the passion for customers that Abaxis and Zoetis colleagues share.”
Veterinary diagnostics category
The veterinary diagnostics category, which includes reference laboratory and point-of-care diagnostics, is estimated to be more than $3 billion, with compound annual growth of 10% over the past three years, according to a company release.
Zoetis expects the diagnostics category to continue to grow faster than the animal health industry, with growth in the mid to high single digits, driven by international adoption of point-of-care diagnostic instruments due to rising medicalization rates, increasing standard of veterinary care and the convenience of in-clinic testing, the company said.
The Abaxis portfolio and platform
Abaxis, founded in 1989 and headquartered in Union City, Calif., is a provider of diagnostic instruments and consumable discs, kits and cartridges to the animal health industry. Abaxis reported revenue of $244.7 million for its fiscal year ended March 31, 2018, an increase of 8% compared to its 2017 fiscal year.
Its VetScan® portfolio of benchtop and handheld diagnostic instruments and consumables serves a large customer base of veterinary practices in North America and is poised for expansion in international markets.
The Abaxis VetScan portfolio includes chemistry and hematology diagnostic instruments and companion discs, kits and cartridges, which are consumables that create a recurring revenue stream. Abaxis recently launched the VetScan FLEX4 Rapid Test to detect Heartworm, Lyme, Ehrlichia and Anaplasma diseases in dogs, as well as its VetScan Canine Pancreatic Lipase Rapid Test, its UA urine chemistry instrument and the Urine Sediment Analyzer.
“We see a prime opportunity to grow our business as part of Zoetis,” said Clint Severson, Chairman and Chief Executive Officer of Abaxis. “We recently invested in expanding operations in Europe, Latin America, and the Asia Pacific Region, with 20% of revenue in fiscal year 2018 coming from our international operations. Zoetis has the global presence and direct veterinary customer relationships to deliver greater value to more customers around the world and accelerate the growth of our international operations. This acquisition gives recognition to our record of success and the highly skilled, dedicated employees of Abaxis who helped build our company over the course of nearly three decades.”