The September 3rd 2013, the announcement ofthe acquisition affected share prices. During the morning, share price went upand reached up to + 2.9%, but after, during the afternoon it went back to 2.81%to €75.18. In a first time, shareholders evaluated that the transaction pricewas too high compared to the sales BioFire is expected to generate in 2014, bypaying 6.4 times this expected revenue 7. Now, as attest figures in the table 2 below, theacquisition of BioFire is a real success in financial terms, and has a realpositive impact on the global revenue of bioMérieux and on its growth; in particularwhen we are looking for the revenue per application (the molecular biology’srevenue).
Sales linked to BioFire products steadily increase from theacquisition and have a positive impact on molecular biology’s revenue. Theacquisition of BioFire in order to reinforce bioMérieux’s molecular diagnosticsbusiness and to consolidate its position as a major player in infectiousdisease diagnostics was a good strategy. In fact, in 2014, BioFire salesrepresented 45% in molecular biology application revenue and in 2016 it lead toa 77% increase year over year.
In order to obtain these results, bioMérieuxinvested in the development of FilmArray; improvement of panels, FDA approvalsallowing it to confirm its market lead compared to its competitors. Outside ofclinical applications, BioFire Defense also contributed to the annual growth ofthe group, in particular in 2014 where it posted €12 million in revenuecompared to zero in 2013, and at the same time, R related revenue wereflat at € 7 million 89.RegardingbioMérieux’s aim to strengthen its presence in North American market, we alsocan conclude that the acquisition of BioFire made a growing contribution (table3).In fact, the large increase between 2014 and 2015 (+42%) should be linked tothe efforts set up to obtain FDA approvals for the FilmArray, among othersthings; in 2015 it obtained the FDA approval for the instrument FilmArray 2.0 andfor the ME panel. RegardingBioFire point of view, it obtains an international presence through bioMérieux’snetwork, because at the beginning BioFire was just in the US market, and now it is known worldwide.In this part, we will see that, in my opinion,bioMérieux has to face to some issuesleading to a certain limitation for this acquisition, as in most acquisitions.
Ina first time, we can raise a possible problem linked to the difference betweenthe American culture and the European culture. In fact, the second one, andhere bioMérieux, is more in the perspective of discussion between partners, in aconsensual way compared to the American who is more self-centered and takeunilateral decision. For example, in bioMérieux side, we talk about anacquisition, which is the real case, and in the BioFire side, we just talk abouta merge between the two companies. BioFire invested a lot during the change ofthe company name in 2012, and it seems to be too proud to admit that it was buying,even if it was its choice. Furthermore,the second issue that we can notice is in term of communication. In fact, thefirst strategy, let BioFire to be autonomous on an operational way, had anegative impact on the global acquisition: now bioMérieux has difficultiesto completely include BioFire in the communication strategy of bioMérieux 6.
Infact, considering that it is not an acquisition but a merge, BioFire remains aseparate entity and has its own communication policy, and is not fully open toadopt the bioMérieux’ strategy. FilmArrayis still known as a BioFire product, instead of a bioMérieux product.Tofinish, few years ago, bioMérieux encountered a big issue with the productionof its blood culture bottle. The lack of these bottles for hospitals had anegative impact on the bioMérieux’s image. It was a supplementary reason forBioFire to do not want to be directly associated to bioMérieux’s image, even ifnow, bioMérieux surpasses this issue and has restore its image 6.
In conclusion, this acquisition is a real success forbioMérieux, in particular in financial terms and allowed to it to strengthenits leader position in the diagnostic market but also in the North Americanmarket. In the BioFire side it is also a success because it allowed for it tobenefit from the international presence of bioMérieux.However,to qualify what we are saying, we canpick up some difficulties in term of communication between both companieslinked to the initial strategy of bioMérieux. In fact, at the beginningbioMérieux wanted to let BioFire run independently the operational activitiesin order to avoid it the complex bioMérieux’ processes. Unfortunately, thisinitial choice has an impact today because BioFire does not completely consideritself as a bioMérieux company but rather seeks to be its equal.
On the other hand, I think that if we analyzeeach acquisition for any company, we can almost every time raise somedifficulties in the operational way. Furthermore,in my opinion, within bioMérieux, and excluding the FilmArray team, thisdistinction between both companies is not really well understanding byemployees because these terms of acquisition are different compared to whatbioMérieux is used to do. In fact, it used to frequently do acquisitions, andeach time, the bought company or product is totally included in the bioMérieux’processes.