For the fiscal year 2014, ending July 31, Pall Corporation reported a 17% y-o-y growth in revenues across its life sciences segment to $413m (€313m) led by a 22% growth rate in sales of consumables for the biopharmaceutical industry attributed to the strength in the market and the benefit of its $185m acquisition of ATMI in February.
The deal boosted Pall’s offering of single-use technology, adding a range of disposable mixing systems, bioprocessing vessels, bioreactors and TK8 film and, according to CEO Larry Kingsley, has placed Pall as one of “a handful of players globally that have the portfolio to play” in the single-use market.
“We expect that single use will grow at a substantially higher rate than the core or stainless biopharma approach to those same applications,” he told investors in yesterday’ conference call discussing results, though stressed the growth in stainless would remain “extremely healthy for quite a number of years to come.”
However, Kingsley added the biggest challenge in the market is ensuring the Pall and newly integrated ATMI leadership team build out the family of single-use products to generate high profit margins.
“If you look at how we stand now relative to the rest of the competitive base, I think we're in demonstrably better shape and we've got a great deal of horsepower that we can work forward.”
Two-pronged M&A
Pall has been investing heavily in the bioprocessing space, adding single-use technology firm Medistad Holdings and solid core microcarrier manufacturer SoloHill Engineering before the ATMI deal, and Kingsley said this M&A strategy was set to continue into 2015.
“Our acquisition focus for 2015 remains the same,” he said. “A two-pronged approach based on, high-growth Life Sciences properties on the one hand, and short-term accretive Industrial bolt-ons on the other.”
He continued: “We're going to continue to make those key strategic investments that drive particularly the biopharm business,” though added Pall’s balance sheet would temporarily suffer due to “fairly expensive transaction prices” associated with any deal.
However, “on the other side, that other prong, what is nice in terms of the offset is that we get some immediate return out of the Industrial acquisitions that we pursue.”