Cormay in acquisition talks in US, upbeat about Q2 and H2 results

2010-08-18

PZ Cormay, the listed supplier and distributor of diagnostic reagents and equipment, is in advanced talks with an unnamed US maker of protein-specific reagents about a takeover, CEO Tomasz Tuora revealed. He added that the target company generated revenues in the region of $10m (€7.8m) and a profit margin of 7%, and that Cormay expected to complete the acquisition by the end of the year. The Polish firm is also negotiating a large contract for the delivery of diagnostic equipment to the US market, which could lift its revenues by more than 50% next year. It has also identified another takeover target, a UK maker of bacteriology tests.
Meanwhile, in July Cormay started shipments of a new haematology analyser developed by Orphee, the Swiss firm it acquired last year. Deliveries had originally been scheduled to start in April, but there were delays with the distribution of the devices. As a result, the company may not be able to fulfill its full-year target to sell 100 units of analysers by the end of December. However, Mr. Tuora is confident that it will meet or even surpass its official sales forecast of PLN 60m (€14.9m). He indicated that second-quarter figures would be even better than in Q1, when sales surged by 78% y-o-y. That is thanks to buoyant demand for the company’s existing portfolio of devices and reagents, especially in Western Europe (where it had not been present before), when they command higher prices.
PZ Cormay also expects a marked improvement in profitability in the second half of the year, when it will shift production of Orphee products to Poland and complete a restructuring at the Swiss firm.