A Memphis-based biotech company has agreed to be acquired for nearly $1 billion.
Massachusetts-based public company Charles River Laboratories Inc. announced Feb. 17 a definitive agreement to acquire Cognate BioServices Inc. for approximately $875 million in cash.
The deal is expected to close in the first quarter of 2021.
“Cognate BioServices presents a unique opportunity to expand into a high-growth, value-added sector of the contract development and manufacturing organization (CDMO) market," Jim Foster, Charles River’s chairman, president, and CEO, said in a release. "This acquisition will be an exceptional strategic fit, adding to our comprehensive suite of early-stage research and manufacturing support solutions."
Charles River provides products and services to pharma and biotech companies to accelerate research and drug development. Cognate is a contract manufacturer of cell and gene therapies and is in the midst of a $212 million expansion in the Memphis area.
To facilitate the local expansion, Cognate received a 15-year, $52 million Jobs PILOT (payment-in-lieu-of-taxes) in November 2020 from the Economic Development Growth Engine (EDGE) for Memphis & Shelby County.
Cognate currently employs about 300 in Memphis, but the expansion could create 561 local jobs, with an average annual wage of $63,749. Including in Memphis, Cognate has operations in North America and Europe, employing more than 500.
In mid-January 2021, work began on the company’s expansion at 5780 E. Shelby Drive to expand its logistics operations.
And, a buildout of facility at 6100 Global Drive to house expanded manufacturing capability is expected to commence in 2021, with a goal of becoming operational “as quickly as possible,” a Cognate spokesperson told MBJ in January.
Taken together, Cognate’s expansion will almost double its manufacturing and distribution capacity in Memphis.
Charles River noted Cognate’s services, primarily cell therapy and plasmid production, addresses a market worth about $1.5 billion worldwide. That market is expected to grow annually by at least 25% over the next five years.
This is not Charles River’s first acquisition in the local bioscience sector. Memphis-based Key Biologics and its parent company, Cellero, were part of an acquisition in August 2020 by Charles River. Cellero provides cellular products for cell therapy developers and manufacturers.
