SGS, the leading global testing, inspection and certification company, announced the acquisition of SYNLAB Analytics & Services (A&S), a leading European environmental, food testing and tribology services company.
“The acquisition of A&S significantly strengthens our global network in key strategic focus areas, including Environment, Food, Life Sciences and Oil Condition Monitoring. This important strategic move, combined with the strong operational progress so far in H2, confirms the next stage of our strategic evolution which will further align SGS to higher value-added services and to the key TIC megatrends,” said Frankie Ng, CEO of SGS.
Mathieu Floreani, CEO of SYNLAB Group: “The transaction creates great opportunities for all involved. While SYNLAB is concentrating on its core medical activities, A&S will benefit from new growth prospects with a future owner that is an expert and leader in that specific market segment. We are convinced that we have found an excellent new home for the business and its employees.”
The purchase consideration is expected to be approximately EUR 550 million and will be fully funded from existing financial resources. The transaction is subject to customary regulatory approvals and is expected to close by early Q1 at the latest. The combination of A&S with SGS’s European laboratory network will accelerate the adoption of a hub-and-spoke model, creating a more comprehensive range of services and generating strong operating synergies. Consistent with the stringent EVA criteria for assessing acquisitions set out at the Investor Days last year, the transaction is expected to be EVA positive in year four of ownership as the result of the full integration of the business and capitalizing on the underlying growth opportunity in this market.
With more than 89,000 employees, SGS operates a network of more than 2,600 offices and laboratories around the world. As part of a larger group focusing on similar market segments, A&S will be able to benefit from scale and leverage new opportunities for future growth. At the same time, the transaction enables SYNLAB to fully concentrate on expanding its core medical activities.
A&S is a leading European provider for environment, food, hygiene, pharma and products analysis and testing. In 2019, A&S generated sales revenues of more than EUR 200m and had approximately 2,000 employees.