Techne Invests $10M In Startup And Eyes Acquisition

After making a $10 million equity investment in CyVek, Inc., Techne Corporation said it plans to acquire the entire company if it meets certain performance benchmarks.

Techne Corporation, the Minneapolis-based biotechnology company that now does business under the “Bio-Techne” brand, recently announced that it’s investing $10 million CyVek, Inc.—and it might eventually buy the entire company for a substantially larger sum.

Bio-Techne, one of Minnesota's 50 largest public companies, is a holding company for two major businesses: Minneapolis-based Research and Diagnostic Systems, Inc., and Abingdon, England-based R&D Systems Europe, Ltd.—both of which develop and manufacture biotech products and clinical calibrators and controls.

Bio-Techne announced its equity investment in Wallingford, Connecticut-based CyVek on Friday. According to a regulatory filing, Bio-Techne has thus far received just under 20 percent of CyVek’s outstanding voting stock, and under the terms of the deal, Bio-Techne “became a party to CyVek’s existing investor agreements and will have an observer seat on CyVek’s board of directors.”

CyVek, a privately held company that was founded in 2010, developed a technology called CyPlex, which, according to Bio-Techne, offers a more advanced and efficient “immunoassay” system used in life sciences research. A commercial launch of the product will initially target customers “who focus on translational research where sensitive, precise, accurate, multi-analyte results from small sample volumes are highly critical,” Bio-Techne said.

Bio-Techne has also reached a deal to acquire CyVek, if the company meets certain benchmarks. Its regulatory filing states that if, within a year, CyVek “meets commercial milestones related to the sale, lease, or license of its CyPlex analyzer product to at least 10 separate customers and the sale of at least 500 of its CyPlex cartridges,” Bio-Techne’s Research and Diagnostic Systems subsidiary will acquire CyVek.

If the acquisition proceeds, Bio-Techne said it would make an “initial payment” of $60 million to CyVek's other stockholders. The total purchase price may be adjusted based on a variety of factors, including CyVek's cash levels and debt, but the deal also calls for Bio-Techne to pay CyVek’s stockholders up to $35 million based on how much revenue CyVek generates. Furthermore, if the deal moves forward, Bio-Techne would pay CyVek’s shareholders 50 percent of whatever dollar amount over $100 million that CyVek’s sales exceed in 2020.

“We are very pleased to have formalized a strong working relationship with CyVek for the testing platform they have developed. We are confident that being able to deploy Bio-Techne's reagents on CyVek’s innovative testing platform will translate into a powerful new solution for our customers,” Bio-Techne CEO Charles Kummeth said in a statement. “These features, in conjunction with the sample processing automation benefits of the CyVek technology, are sure to deliver valuable benefits to all users of this new technology.”

Kummeth, a former 3M Company executive, recently became Bio-Techne's CEO. (Longtime leader Thomas Oland resigned prematurely in protest of the company’s choice to include external candidates in the search process for his successor; the company also recently named a new chief financial officer.)

Kummeth said in a statement that the CyVek investment (and potential acquisition) is “consistent with our long-term strategy to expand Bio-Techne’s business from being a reagent supplier to an applied-markets solutions provider.”

CyVek President and CEO Per Hellsund, meanwhile, said that “with its legacy as the world’s most thoroughly characterized antibody company, Bio-Techne has antibodies and reagents that are a perfect complement to the CyPlex platform.”

Last year, Bio-Techne acquired Bionostics Holdings Limited and its operating subsidiary, Bionostics, Inc., for $104 million in cash.