PerkinElmer Poised to Turn M&A Deals into Growth

PerkinElmer (PKI) , driven by a slew of merger and acquisition (M&A) deals, is poised to turn those expenditures into newfound revenues and growth, analysts believe.

PerkinElmer is technology company focused on the diagnostics, research, environmental, industrial and laboratory services markets. Its products and services are sold in more than 150 countries.

“Our strategy is to provide innovative products, solutions and services that drive productivity improvements in targeted high growth market segments” in healthcare, PerkinElmer management said in a recent filing.

Part of the strategy involves M&A. The company bought several companies in 2011, including Caliper Life Sciences, Dexela Limited, Labtronics, Geospiza, CambridgeSoft Corporation, ID Biological Systems, ArtusLabs, and chemagen Biopolymer-Technologie.

That comes on the heels of multiple acquisitions during 2010. The company also undertook a restructuring that resulted in several million in charges.

PerkinElmer has a market cap of $2.98 billion in a sector, life sciences tools and services, where the average company size is $1.27 billion. Its projected earnings per share growth for the coming year is 12.2 percent, compared to a sector average of 13.72 percent.

“We believe we are well positioned to continue to take advantage of the stable spending trends in our end markets and to promote our efficiencies in markets where current conditions may increase demand for certain services,” management said.

“Overall, we believe that our strategic focus on Human Health and Environmental Health coupled with our breadth of end markets, deep portfolio of technologies and applications, leading market positions, global scale and financial strength will provide us with a strong foundation for continued growth.”

High growth

Analysts are generally positive about PerkinElmer’s prospects. Merrill Lynch, Goldman Sachs, Standard & Poor’s and UBS have buy or outperform ratings on the stock.

“We think PKI is benefiting from its years-long portfolio restructuring and strategic efforts of international expansion, significant R&D investments, and strategic acquisitions, focused on supplementing organic growth,” S&P analysts said in early February.

“PKI has been expanding into higher margin, high-growth markets such as informatics, which we believe will provide long-term benefits.”

PerkinElmer next reports on July 26.