Meridian Bioscience Board Succession Hints At M&A Appetite Change, Canaccord Says

In a report published Monday, Canaccord Genuity analyst Mark Massaro hosted an investor meeting with

's Chief Financial Officer Melissa Lueke which left the analyst "encouraged" as the company appears to be "energized" and on a new strategic path. According to Massaro, following the passing of Meridian's founder and Chairman Bill Motto, the company appointed CEO Jack Krauetler as Chairman. Following the appointment, the company has developed a "new way" of thinking about its growth plans. Part of the plans could involve the announcement of a deal or two or a merger of equals over the next few quarters. Massaro continued that Meridian is "actively exploring" opportunities to acquire capabilities in food testing or animal health, or acquire (or license) a business or technology platform in the molecular, point-of-care space that is CLIA-waivable. Massaro noted that the probability of the company acquiring a business is greater than the probability of a merger of equals, but the latter would likely result in a suspension of its dividend policy. The company claims it is a "buyer" with $43 million in cash and $30 million its credit facility along with no debt.

Massaro also discussed Meridian's business, noting that it submitted its HSV (herpes simplex virus) ½ offering to the FDA in April and the analyst is expecting an FDA clearance in the Fall. The company is also developing tests for malaria and campylobacter as well as a third assay that has yet to be announced and could decide to submit its CT/NG test to the FDA. Finally, Meridian is also looking to launch a new H. Pylori test as its current patent expires in May 2016. Shares were reiterated with a Hold rating with a price target raised to $20 from a previous $19.