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Posted on December 15, 2011
By Malinda Larkin
In a $43 million deal, IDEXX Laboratories Inc., a veterinary diagnostic testing corporation, bought the University of Missouri-Columbia Research Animal Diagnostic and Investigative Laboratory. RADIL has provided health monitoring and diagnostic testing services to bioresearch customers since it began in 1968.
Though it started out small, RADIL's volume has grown dramatically in the past 10 to 15 years, said Dr. Neil C. Olson, dean of the MU College of Veterinary Medicine. Administrators have been working on moving the laboratory into the private sector for a few years now.
"It couldn't grow much more staying in the academic sphere, but it had lots of growth potential going into private enterprise, especially from a global perspective. The buyer recognized that," Dean Olson said. "They have the global platform and infrastructure to bring it into the global market."
Headquartered in Westbrook, Maine, IDEXX Laboratories employs more than 4,900 people and serves veterinarians in more than 100 countries with a broad range of diagnostic and information technology–based products and services.
Jonathan Ayers, chairman and CEO of IDEXX, said in a Nov. 7 statement that the bioresearch market is a strategic fit for IDEXX, allowing the company to leverage its expertise in veterinary diagnostics as well as its integrated offering of reference laboratory and in-clinic testing solutions.
"The acquisition of RADIL, with its international reputation, track record of innovation, and solid relationships with key bioresearch customers, will create a strong foundation for our further participation in this market," he said in the statement.
The company expects to generate $12 million in revenue from RADIL in 2012.
Details of the distribution of the proceeds from the purchase have yet to be settled; Dean Olson said he'll work with the chancellor, but most of the $43 million will go to the veterinary college. Most of these funds will be invested in an endowment that he estimates will generate 5 percent a year and provide a source of funding in perpetuity.
"Yes, we're giving up revenue in the short term, but you don't know what will happen in five or 10 years. Companies can go broke, but we have a solid foundation with the endowment," the dean said, adding, "Colleges these days have to look for alternative sources of revenue. You have to think in the long term, instead of the short term will get you this or that."
The college received about $1 million in revenue each year from the laboratory, but the endowment is expected to bring in 50 percent greater revenue, Dean Olson said.
One of the veterinary college's criteria in soliciting bids was that the buyer would have a long-term interest in working with the college.
"Going forward, we hope to have a real partnership that's above and beyond the enterprise we sold to IDEXX," he said.
All RADIL employees will join IDEXX and continue operations in Columbia. Residents and graduate students in the MU Comparative Medicine Training Program will continue to receive laboratory training there, but the program will not be directly associated with RADIL.
Dean Olson sees privatization of assets becoming a trend at veterinary colleges and says the sale of RADIL is just an attempt by Mizzou's veterinary college to diversify its portfolio.
"It's what we have to do. We can't rely on the broken model of state funding. If you do, you'll be disappointed," he said. |