MergerMarket
Neogen eyeing potential targets; 'strong candidates on the radar screen'
08 JAN 2018
Neogen [NASDAQ:NEOG], the Lansing, Michigan-based manufacturer of food and animal safety products, continues to have an active M&A process, Executive Chairman Jim Herbert said.
In his prepared remarks on the 2Q18 earnings call held 3 January, he outlined the efforts.
"In the area of acquisitions, we don't have any letters of intent on the table today, but we do have some strong candidates that are on the radar screen, located both in the US and outside, and for both food safety and for animal safety," Herbert said.
Later on the call, Janney analyst Paul Knight asked if the company was ready to ramp up its acquisition efforts.
"There are opportunities out there...I believe we've got four on the radar screen now," Herbert replied. "But the whole issue is integration, and we've got a team that's stretched pretty tight."
He added that the company was spending time on due diligence.
"Jason Lilly, our vice president of corporate development, is extraordinarily accomplished in this area," Herbert said.
In his opening remarks, Herbert noted that he retained the title of Executive Chairman when John Adent succeeded him as CEO in July 2017. "John and I are sharing responsibilities as he gets the opportunity to get up to speed," Herbert said.
Neogen’s Food Safety segment consists primarily of diagnostic test kits and complementary products sold to food producers and processors to detect dangerous and/or unintended substances in human food and animal feed. The company's Animal Safety segment makes and markets veterinary instruments, pharmaceuticals, vaccines, topicals, diagnostic products, rodenticides, cleaners, disinfectants, insecticides and genomics testing services.
The most recent quarter marked the first time Neogen exceeded USD 100m in quarterly revenues.
Except for a relatively quiet 2017, the company has been a steady buyer in recent years, with acquisitions typically valued in the single or low double-digit millions. External advisors have included Michigan-based Lowe Law Firm, which is named as Neogen's legal counsel in its most recent annual report.
Neogen has a market capitalization of USD 2.2bn.