brooks automation · 2018-09-26 · brooks is acquiring genewiz group for $450m 3 founded in 1999...
TRANSCRIPT
September 26th, 2018
Brooks Automation
Conference Call Acquisition of GENEWIZ
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Safe Harbor Statement
22© 2018 Brooks Automation, Inc. • Proprietary Information
“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995; certain matters in this presentation, including forecasts of future demand and future Company performance, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to materially differ, either better or worse, from those projected. Further discussions of risk factors are available in the Company’s most recent SEC filings, including the annual report on Form 10-K for the fiscal year ended September 30, 2017 and any subsequent quarterly reports on Form 10-Q. The Company assumes no obligation to update the information in this presentation.
Regulation G
This presentation contains certain non-GAAP measures which are provided to assist in an understanding of the Brooks business and its operational performance. These measures should always be considered in conjunction with the appropriate GAAP measure. Reconciliations of all non-GAAP amounts to the relevant GAAP amount are provided as an attachment to this presentation.
Brooks Is Acquiring GENEWIZ Group for $450M
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Founded in 1999
− HQ in New Jersey
− Global operations with facilities in US, EU, Asia
Genomic sequencing and synthesis
− Sanger and Next Gen Sequencing
− Differentiated delivery model
Primary End Markets:
− Pharma and academic institutions
− Over 4,000 institutional customers and more than 100,000 end users
− No customer more than 4% of revenue
Key CustomersGlobal Leader in Genomics Services
Attractive Revenue Profile
© 2018 Brooks Automation, Inc. • Proprietary Information
Historical Revenue Growth*
($M)
$39$50
$63$79
$91
$120
2013 2014 2015 2016 2017 2018F
4%
10%
17%
69%
Japan Europe China US
2017 Revenue by Region
* GENEWIZ actuals provided by management on Brooks’ Fiscal year basis
Industry Leading Capabilities in Strong Markets
Next Gen Sequencing
Largest and fastest growing segment
Sanger Sequencing
Market leader, ‘high value magnet’ capability
Gene Synthesis
High quality capabilities in a rapidly growing
segment
GENEWIZ Market Opportunity
44© 2018 Brooks Automation, Inc. • Proprietary InformationSource: ClearView Healthcare Partners
$1.8B
$4B
2018 2023
Market Size
Strategic Rationale for the Acquisition of GENEWIZ
Further expansion into high growth areas of Life Sciences
− GENEWIZ is a global leader in genomics services
− Expands Brooks’ value in sample-based management and sample-based research offerings
− Establishes primary participation in the ~$2B SAM opportunity of Genomics Services
A high growth profitable acquisition
− $140M expected revenue for 2019 fiscal year
− Non-GAAP gross margins of ~50%
− Immediately accretive to non-GAAP earnings
5© 2018 Brooks Automation, Inc. • Proprietary Information
Brooks is acquiring GENEWIZ Group for $450M
Transaction Highlights
6© 2018 Brooks Automation, Inc. • Proprietary Information
▪ Acquiring GENEWIZ for approximately $450M payable at closing, of which $30M is held in escrow
Transaction
Value
▪ Expected to close before the end of calendar year 2018
▪ Subject to regulatory approvals and customary closing conditions
▪ Financed with cash from Brooks’ balance sheet and $350M of incremental senior secured term loan; Leverage ratio target remains at 3x or below
Timing
Financing
GENEWIZ – Further Builds Our Growth Model With Life Sciences and Semiconductor Automation
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2013 2014 2015 2016 2017 2018 F
36%CAGR
GENEWIZ Automation and CCS
© 2018 Brooks Automation, Inc. • Proprietary Information
2013 2014 2015 2016 2017 2018 F
Sample Management
12%CAGR
11 Cash Acquisitions* for ~$365M 4 Cash Acquisitions* for ~$115M
~$198
Revenue $M
~$435
Life Sciences ~40%
25%CAGR*
2013 2014 2015 2016 2017 2018 F
~$120
* Acquisitions made since 2011; GENEWIZ actuals and estimate as reported by management
Acquisition Price $450M
Semi Equip ~60%
FY13 FY14 FY15 FY16 FY17 FY18F
Our Transformation to High Growth Segments ContinuesExcluding Cryogenics and Other Discontinued Business; 2018 Pro Forma with GENEWIZ
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~$250
~$750
Semi Stable Leadership
Semi Tech Drivers
Life SciencesSample Management
• Wafer level packaging
• Contamination control
• Vacuum automation
~ 80% of revenue from higher growth segments
Revenue $M High Growth Elements
© 2018 Brooks Automation, Inc. • Proprietary Information
GENEWIZ 25% CAGR 2013 - 2018
• ATM robots / 200mm automation / Services
• Excluding divested and discontinued revenue streams
* Estimate and 5 year growth provided by GENEWIZ management
Consistent Strategy Going Forward
Extend leadership in core markets1
Advance the rapid growth of Life Sciences
with organic and acquisition investments2
Drive margin expansion3
Utilize balanced and disciplined
capital deployment4
© 2018 Brooks Automation, Inc. • Proprietary Information 9
A Company on the Move to Higher Value and Higher Growth
• RTS for $3M
• Nexus for $85M
• Crossing
Automation
for $59M
• Divested of
Contract
Manufacturing
for $78M
• Matrical for $9M
• 22% of BioCision
for $4M
• DMS for $32M
• Divested of Granville-
Phillips
instrumentation
for $87M
• FluidX for $16M
• BioStorage
Technologies
for $125M
• Contact for $7M2011 / 12
2013 / 14
2015 / 16
• BioCision additional $11M
• PBMMI for $34M
• FreezerPro software for $5M
• 4titude Ltd. for $66M
• BioSpeciMan for $5M
• Agreement to acquire
GENEWIZ for $450M
• Tec-Sem for $15M
• Agreement to Divest
Cryogenics for $675M
2017 / 18Acquisitions
▪ Life Sciences ~$365M 815M
▪ Semi ~$115M
Prepared to Continue On Our Path
ROIC Focus
GENEWIZ funded with debt and available cash
Semi Cryo divestiture expected to yield ~$560M cash
No dependency between the two deals
© 2018 Brooks Automation, Inc. • Proprietary Information10
Key Takeaways
The acquisition of GENEWIZ accelerates Brooks transformation
into Life Sciences’ higher growth and higher value businesses✓
Positions Brooks in the center of the attractive gene sequencing and
gene synthesis markets✓
Company strategy remains the same – continued market leadership
in Semi Automation and Life Sciences✓
Accretive to Brooks’ earnings, growth and margins – updated
guidance to be provided with next earnings announcement✓
11© 2018 Brooks Automation, Inc. • Proprietary Information
Q&A