Research tools maker Invitrogen Corp. (IVGN) Thursday said that it has completed a significant milestone in the integration planning for its combination with Applied Biosystems Inc. (ABI). The company also lifted its earnings per share outlook for fiscal 2009.
In June, Carlsbad, California-based Invitrogen had announced its proposed $6.7 billion merger with Applied Biosystems. The company said Thursday that it has finalized the synergy targets by identifying specific actions and timing to achieve the synergies for all functions within the new company.
The company currently expects that it will achieve synergies of at least $80 million in the first year after close of the transaction, mostly attributable to cost savings. The company's prior estimate was $60 million. The company expects the merger deal to close in November.
Further, the company stated that the increase in synergies, as well as lower-than-expected share count of 179 million shares, will lead to higher-than-projected earnings per share growth. However, these positive benefits will be offset in part by recent fluctuations in currency exchange rates and an increase in interest rate on new debt, the company said. Based on these factors, the company now expects fiscal 2009 earnings of at least $2.65 per share, up from its previous forecast of at least $2.60 per share. Analysts forecast full-year 2009 earnings of $2.71 per share.
In addition, the company provided a preview of its third-quarter financial results. The company said quarterly non-GAAP earnings per share grew above 20%, driven by higher volume and continued operating margin expansion. Third-quarter total revenue growth was in the mid-teens including several points of growth attributable to foreign currency exchange. Wall Street analysts currently expect third-quarter earnings of $0.58 per share on revenues of $350.93 million.
Invitrogen said it will provide more detailed financials after markets close on October 21.
Commenting on the company's integration with Applied Biosystems, Greg Lucier, chairman and chief executive officer of Invitrogen, said, "We remain very operationally focused so that we can deliver on the promise of our combination with Applied Biosystems, and we're gratified by the positive sentiment our shareholders have expressed regarding the short-term and long-term value of the deal."
IVGN is trading at $31.12, up $0.44, on a volume of 1.12 million shares.
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