PerkinElmer Acquires EUROIMMUN

19 Pages Posted: 13 Sep 2020

See all articles by Luann J. Lynch

Luann J. Lynch

University of Virginia - Darden School of Business

Lauren Sless

University of Virginia - Darden School of Business

Abstract

On June 16, 2017, PerkinElmer, Inc., announced that it would acquire EUROIMMUN Medizinische Labordiagnostika AG (EUROIMMUN), thus making EUROIMMUN an official subsidiary of PerkinElmer. Students are expected to consider strategic motivations behind the acquisition, from the perspectives of both parties, as well as the risks associated with such an acquisition. In addition, they should be able to prepare a pro forma post-acquisition consolidated balance sheet for the combined company. This case is intended for use in a financial accounting course to demonstrate the accounting for acquisitions, specifically where intangible assets could be motivating factors for purchase. Students are expected to prepare two post-acquisition consolidated balance sheets for PerkinElmer (with and without the use of short-term debt facilities), and must consider justifications and risks behind each financing option. Students are asked to consider potential motivations for the acquisition, risks to both parties in entering into this agreement, and market advantages resulting from PerkinElmer's acquisition of EUROIMMUN. In addition, students will also be exposed to and explore the rationale behind the goodwill and intangible asset fair values and purchase price allocations as assessed by PerkinElmer.

Excerpt

UVA-C-2441

Jun. 16, 2020

PerkinElmer Acquires EUROIMMUN

Introduction

Haley Wells, a first year MBA student at the University of Virginia's Darden School of Business, could not wait to start her corporate finance internship in the biotech industry in May 2018. She decided to start preparing early by familiarizing herself with major business developments in the medical device, health care, and biotechnology sectors. As she was scrolling the headlines on her LinkedIn feed, Wells noticed that there was a new announcement from PerkinElmer, Inc. (PKI on the NYSE), a $ 2.9 billion global corporation with a focus in life sciences and health careā€”the company had just released its 2017 10-K. Wells had been idly following the company, one of the historic leaders in the life sciences industry, because she hoped to transition into that industry after she completed her MBA. She had some professional experience working with biotechnology clients and medical device manufacturers that she hoped would boost her chances of landing a position in the industry.

Naturally, Wells couldn't resist taking a look through the company's consolidated financial statements contained in its 10-K. As she began scanning through the document, she saw where PerkinElmer had made a major acquisition, which had been announced the previous summer. The acquisition was of a formerly privately owned German-based in vitro diagnostics (IVD) and medical device manufacturer named EUROIMMUN Medizinische Labordiagnostika AG (EUROIMMUN) for $ 1.3 billion. Now Wells had never heard of EUROIMMUN, and considering the acquisition price was over 50% of PerkinElmer's $ 2.3billion top-line revenue in 2017, she was curious as to what value this European company brought to the US-based company for such a large price. Furthermore, how did PerkinElmer finance this massive transaction, and was the risk worth the reward?

. . .

Keywords: accounting, mergers and acquisitions, M&A, consolidated balance sheets, risk analysis, financial analysis, intangible assets, financing

Suggested Citation

Lynch, Luann J. and Sless, Lauren, PerkinElmer Acquires EUROIMMUN. Darden Case No. UVA-C-2441, Available at SSRN: https://ssrn.com/abstract=3636597

Luann J. Lynch (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4721 (Phone)
434-243-7677 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/lynch.htm

Lauren Sless

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
146
PlumX Metrics