Accuri Exit Showers Michigan With A Lot Of Love

3/30/11Follow @xconomy

The more you look at Becton, Dickinson & Co.’s (NYSE:BDX) recently completed acquisition of Accuri Cytometers in Ann Arbor, MI, the more there is to like. Even savor.

BD did not disclose financial terms, which is a little annoying since the medical device and equipment maker, based in Franklin Lakes, NJ, had no problem telling the world it paid $275 million for HandyLabs, another Ann Arbor startup, in 2009.

But thanks to a helpful source with knowledge of the situation, I learned BD paid $205 million for Accuri, a University of Michigan spinoff that makes sophisticated machines that count cells. That means BD has dropped nearly half a billion dollars on two Michigan startups in less than three years.

And BD, which reported $7.35 billion in revenue last year, paid a hefty premium for its latest conquest.

I previously estimated Accuri, a private company, generated about $25 million in annual sales on the low end, based on some previously disclosed sales figures and product pricing.

From what I can tell, my most conservative estimate, admittedly an unscientific calculation, wasn’t too far off. So based on Accuri’s $205 million sale price, BD paid at least 10 times revenue, about two to three times what a similar company would fetch on the market.

What helped Accuri was that BD was bidding against other buyers, my source says, which likely drove up the price.

I’m not smart enough to say whether BD paid too much for Accuri. But I do think Accuri’s multiple suitors says something about the quality of its business. It’s not like buyers are tripping over themselves to overpay for medical device companies, or any healthcare firm, these days.

In 2010, global healthcare-related mergers and acquisitions totaled $235.4 billion, up just 1 percent from the previous year, according to Dealogic. For the first three months of this year, healthcare deals totaled $39.3 billion, a 49.4 percent decline from the same period in 2010.

The Accuri transaction spread a lot love across Michigan, starting with Ann Arbor-based Plymouth Venture Partners, which owned 6.2 percent of the company, and Arboretum Ventures, also in Ann Arbor, which participated in three rounds of financing.

But the biggest winner may be the humble civil servant.

If you’re a public worker, there hasn’t been a whole lot to cheer about these days- budget deficits, pension shortfalls, fierce political attacks on public unions.

But Michigan teachers, police, and state employees can enjoy some bit of good news. Their pension funds owned unspecified stakes in Accuri through both Arboretum and InvestMichigan! Growth Capital Fund.

Accuri represents the first cash return on investment for InvestMichigan, which was created in 2008 by then-Gov. Jennifer Granholm to bankroll emerging Michigan companies. Its portfolio of 19 companies include Pioneer Surgical Technologies, gloStream, and Sakti3.

InvestMichigan generated a return “greater than 4.5 times” its investment in Accuri, according to Bob Payne, In-House State Investment Specialist with Credit Suisse Customized Investment Group, which manages the fund with Beringea Group. Payne declined to disclose the exact size of the fund’s stake in Accuri.

Accuri’s benefits to Michigan apparently won’t end with its sale price. BD, which drew criticism from closing HandyLab’s office in Ann Arbor, will reportedly soon establish some sort of presence in town, though it’s not clear whether it will be a separate office or Accuri-related operation.

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