Agilent Technologies Inc.(A) announced that it has acquired the assets of Aurora SFC Systems, Inc. for an undisclosed sum. Aurora SFC Systems, Inc. is the leading provider of supercritical fluid chromatography (SFC) products for laboratory research and development.
SFC technology has particular importance in the food testing segment, where it has been used for the analysis of pesticide residues in food items. The most prevalent technique used in food testing is currently liquid chromatography (LC). This is a technique that uses suitable liquids to analyze the components in the food item, displaying the data in pictorial form. SFC technology also offers pictorial output, but its advantage lies in its simplicity, which speeds up data collection, and thereby, the entire testing process and this is where Agilent’s interest lies.
As per a study conducted by marketsandmarkets.com, it has been found that meat and poultry, which already accounts for the largest share of food testing spending by type is expected to increase at a compounded annual growth rate (CAGR) of 11.09% from 2010 to 2015. Processed food is the second largest segment with an estimated CAGR of 11.58% from 2010 to 2015.
There is a growing awareness about the harmful effects of pesticides on food products. Food testing and processing have thus become all the more important. Additionally, it also helps to detect pathogens like E-Coli, toxins and genetically modified organisms (GMOs).
Agilent already enjoys a strong market position, but the company’s food testing business has disappointed in recent times. With the acquisition of Aurora’s supercritical fluid chromatography assets, Agilent will be able to provide fully integrated, single-vendor SFC solutions. This could enable the company to grow sales and even pick up some market share.
Agilent’s revenue in the third quarter was flat sequentially and up 1.9% year over year. Revenue fell short of management’s expectations of a 2-3% sequential increase ($1.77 billion to $1.79 billion). The Chemical Analysis segment generated 22.0% of third quarter revenue, down 8.8% sequentially and 7.0% year over year. The sequential decline was largely due to weakness in food testing, although chemical/energy was also down significantly and the forensics/environmental was flat. All three markets fared similarly when compared with the year-ago quarter.
Currently, Agilent Technologies Inc. has a Zacks #3 Rank, implying a short-term ‘Hold’ rating.
To read this article on Zacks.com click here.
Zacks Investment Research
