Harvard Bioscience in sale process

This article is provided to FT.com readers by mergermarket—a news service focused on providing actionable, origination intelligence to M&A professionals. www.mergermarket.com
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Harvard Bioscience (NASDAQ: HBIO), the Holliston, Massachusetts-based life sciences research equipment manufacturer, recently started a sale process, a source familiar with the matter and an industry banker told mergermarket.

The company has hired Euroconsult, a boutique investment bank to run the process, said both sources.

Numerous private equity firms have been participating in the process, said the source familiar. It’s not clear if there are strategic buyers in the auction.

In 2007, the company received an offer at USD 5 per share from Skystone Advisors, which at that time owned 15.4% of the company. Harvard’s board unanimously rejected the offer stating that it undervalued the company. Skystone is no longer a top shareholder, according to the latest available public filings. CEO Chane Graziano owns a 12.94% stake.

The company’s stock traded at USD 4.43 per share on Thursday. Its market cap is USD 128.5m. It reported annual revenues and operating expenses of USD 108.2m and USD 10.2m, respectively, in 2010.

Officials at Euroconsult, Graziano and company president David Green did not return calls seeking comment.

When it disclosed its offer, Skystone noted that the company should pursue a more aggressive acquisition strategy, and be able to double its revenue and pre-tax profit within three years through accretive deals. “Historically and recently, the timing of these tuck-in acquisitions has been inconsistent due to the often lengthy process of buying small privately owned businesses, management bandwidth, and the Company’s capital constraints,” Skystone said at the time.

Harvard Bioscience has completed 22 small acquisitions in the past 14 years, as previously reported by this news service. As reported, at a recent UBS healthcare conference David Green was asked why the company’s stock price was so low; he said it was because the company currently has no analyst coverage.

As previously reported, Green also said Harvard Bioscience has a regenerative medicine division that needs external funding to reach its full potential. The company could spin off that division or it could be funded separately by venture capital funds.

Harvard Bioscience was founded in 1901 as Harvard Apparatus. It sells products to thousands of researchers in over 100 countries through a catalog, its own sales organization, and distributors such as GE Healthcare, Thermo Fisher Scientific and VWR, according to public filings.

The company’s first regenerative medicine tool, the “InBreadth” hollow organ bioreactor, was used to perform the world’s first human transplant of a regenerated bronchu by Dr. Paolo Macchiarini. The company has licensed the product from Dr. Macchiarini, and is working to commercialize it.

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