Bio-Rad Laboratories makes a most excellent array of research laboratory and medical testing equipment. The company manufactures and supplies more than 8,000 products through two segments. Its clinical diagnostics segment makes products used in blood, fluid, and tissue testing to detect diseases such as diabetes. Its life science unit offers instruments, apparatus, reagents, and software used in lab settings to study life processes, potential drugs, and food pathogens. Bio-Rad has a sales force that sells directly to such end users as clinical labs, pharmaceutical firms, hospitals, government agencies, and universities. More than two-thirds of sales come from outside the US.
Sales and Marketing
Much of Bio-Rad's global growth comes from customers in emerging regions such as Eastern Europe, Latin America, and the Pacific Rim. The company sells directly and through distributors in some 35 countries.
Unlike most companies in the recessionary environment of 2009, Bio-Rad was able to grow sales by about 1% during the year. Sales rose 8% in 2010 and another 8% in 2011, as global economic conditions improved. The company continues to be profitable, with gross margins in the range of 57%. It keeps its product mix tilted toward higher margin products, such as reagents, and has reduced manufacturing costs by moving some of its production offshore to lower cost regions such as China.
Bio-Rad's clinical diagnostics segment (about two-thirds of sales) reported an 8% increase in sales over 2010, primarily due to higher sales of its quality control, immunohematology, clinical microbiology, and diabetes monitoring product lines. Sales rose 7% in its life science segment, ending the year with momentum as it launched new imaging products and a rapid western blotting instrument. Life science customers rely to a large extent on government grants and research contracts for funding, and the segment continues to be affected by weakness in the European government-funded research markets.
Mergers and Acquisitions
Bio-Rad expands its product lines with acquisitions. In late 2012 it announced an agreement to acquire a leading antibody manufacturer, AbD Serotec, a division of MorphoSys, for €53 million (about $70 million) in cash.
In late 2011 the company bought QuantaLife, a maker of genetic analysis systems, for about $162 million. QuantaLife's digital PCR (Polymerase Chain Reaction) will complement Bio-Rad's amplification reagents business. The following year, Bio-Rad bought a cell sorting system from Propel Labs, which it will begin offering to its customers in early 2013.
In early 2010 Bio-Rad acquired certain diagnostic businesses of Germany-based Biotest AG for about $65 million, broadening its offerings of products used in blood transfusion, transplantation, and infectious disease testing applications. The acquired Biotest operations contributed nearly 3% to the company's sales for the year and became part of Bio-Rad's clinical diagnostics business.
Bio-Rad Laboratories is controlled by CEO Norman Schwartz and members of the Schwartz family. – less