Life Science Firm Bio-Techne's Success Formula: Astute Acquisitions Offering Transformation

William Blair has initiated coverage on coverage of Bio-Techne Corp TECH with an Outperform rating. 

Bio-Techne is positioned in high-growth and attractive end-markets, notably cell and gene therapy (C&GT), spatial biology, and liquid biopsy, representing a total addressable market (TAM) of above $8.0 billion. Entrance into these markets is built off existing capabilities and thus has synergies with the legacy business.  

Analysts Matt Larew, Sam Martin, and Madeline Mollman say that Bio-Techne's positioning in C&GT and spatial biology is not fully appreciated. The franchise is valued at $100 million.

It's not only growing at double-digit rates but is also already yielding profits. 

RNAscope stands out in the translational space owing to its unique double-probe method that delivers highly precise results. 

With the recent acquisition of Lunaphore, Bio-Techne is poised to offer an automated spatial workflow. This positions the spatial franchise to exceed $300 million by fiscal 2027 potentially.

Moreover, instead of over-investing in saturated markets, the management is known for pinpointing top-tier assets in emerging sectors and securing them early in their growth trajectory. 

Overall, Bio-Techne's extensive product range covers a TAM of approximately $24 billion, with growth rates in the double digits.

Bio-Techne's legacy is characterized by adept acquisitions and seamless integrations. 

These strategic moves have consistently fueled double-digit organic growth, facilitating the company's foray into new markets. 

Once unprofitable and lacking scale, several of these acquired entities have transformed into key drivers of Bio-Techne's growth and profitability.

Price Action: TECH shares closed 2.37% lower at $78.26 on Monday.