SurModics Acquires BioFX Laboratories

What did SurModics and BioFX announce on August 13, 2007?

SurModics, Inc. and BioFX have completed the SurModics acquisition of BioFX, a developer, manufacturer and marketer of colorimetric and chemiluminescent substrates which detect and signal that a reaction has taken place in a diagnostic test kit.  Under the terms of the agreement, SurModics has acquired all assets of BioFX, including key technology.

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What are the financial terms of the transaction?

SurModics paid $11.3 million in cash at closing and may pay up to an additional $11.4 million in cash upon the successful achievement of certain revenue targets. BioFX generated sales of $3.5 million in calendar year 2006, having achieved 16% growth compared with calendar year 2005 sales. BioFX is profitable and cash flow positive. The acquisition is expected to be accretive to fiscal 2008 earnings.

What are the anticipated acquisition benefits of the transaction?

The acquisition of BioFX by SurModics:

--Helps drive many elements of SurModics’ strategic growth plan, including revenue diversification

--Broadens SurModics’ product portfolio within the in vitro Diagnostics market

--Provides complementary customer bases between the two companies

--Diversifies SurModics’ revenue streams

--Is expected to be accretive in fiscal 2008

Who is BioFX?

BioFX, a SurModics company, is a leading manufacturer of substrates, which detect and signal that a reaction has taken place in a diagnostic test kit.  BioFX offers both colorimetric and chemiluminescent substrates, as well as other products.  These products are used throughout the academic, industrial and government research sectors in fields spanning Diagnostics, molecular biology, genomics, proteomics and drug discovery.  More information about BioFX is available at www.biofx.com.

Why did SurModics acquire BioFX?

BioFX’s product line and customer base complement SurModics’ other product offerings within the In Vitro Technologies business unit. The acquisition of BioFX allows SurModics to broaden its product and technology offerings in the in vitro Diagnostics market.  SurModics believes that the addition of BioFX’s highly regarded product line and technical expertise will solidify its position as a leading supplier of components to the immunoDiagnostics market.  BioFX has a well deserved reputation for providing high performance, high quality substrates.  BioFX is particularly strong in colorimetric substrates, where they continue to displace competitive technologies regularly. In addition, they have a growing presence in chemiluminescent substrates, which is a newer segment of the market.

In lay person's terms, what are BioFX’s products and how do they work?

BioFX develops, manufactures, and markets high sensitivity substrates.  Substrates are generally categorized into two types: colorimetric and chemiluminescent, both of which BioFX produce.  These substrates are used to detect and signal reactions within manual and automated diagnostic tests so that a result can be recorded. 

For example, in one type of diagnostic test, an unknown amount of antigen in a sample is immobilized on a surface.  A patient sample containing antibody is added over the surface. This antibody is linked to a detection molecule (i.e., an enzyme) that visibly reacts when activated--for instance, light hitting a fluorescent enzyme.  The brightness of the fluorescence would then tell you how much antigen is in your sample.  The detection methods for colorimetric substrates and chemiluminescent substrates are a spectrophotometer and luminometer, respectively.

What does this mean for BioFX customers, partners and distributors?

BioFX customers, partners and distributors should not expect to see any significant impact resulting from the acquisition by SurModics. Customers of both companies should benefit from a larger portfolio of products and solutions to address their needs. SurModics plans to continue to offer all BioFX customers outstanding sales and support for their products.

When will BioFX customers, partners and distributors be notified of the acquisition?

BioFX and SurModics are in the process of notifying all parties of the close and that they should continue to conduct business with the respective companies as usual.

Who should customers call to place new orders?

Customers should continue to contact BioFX to order BioFX products. Customer service representatives may be contacted directly at 1-800-445-6447 or by email at customerservice@biofx.com. 

More information about BioFX can be found on their website at www.biofx.com.  BioFX customers in Europe and outside the United States should continue to contact their existing distribution channel. A complete list of these distributors can be found on the website (www.biofx.com).

For SurModics products, customers should continue to contact their current SurModics sales and customer service representatives. The SurModics toll-free number for product information and ordering is: 1-800-755-7793. Customers may also email orders@surmodics.com.  For technical support, please email techsupport@surmodics.com.

More information on SurModics IVD products and technologies may be found at www.surmodicsIVD.com.

Where should customers go for information on BioFX products?

Customers can continue to go to the BioFX website at www.biofx.com.  They may also call customer service directly at 1-800-445-6447.

Where should customers go for information on SurModics and its products and technologies?

Customers can go directly to www.surmodicsIVD.com for information regarding SurModics’ in vitro diagnostic (IVD) products and technologies. They may also call customer service directly at 1-800-755-7793.

For more information about SurModics, Inc. and its other businesses, customers may visit SurModics’ home page at www.surmodics.com.

Will my contact numbers and email address' change for BioFX?

No, currently all contact information will remain the same. 

Is my BioFX quotation still valid?

Yes.

Will the BioFX website change or move to the SurModics website?

In the near term, the BioFX website will remain and will not have any functional changes. There will be a link between the two company websites for your convenience.

Will BioFX and SurModics continue to sell and support BioFX products?

Yes. BioFX and SurModics will continue to develop and support BioFX's current product lines.

How will warranty and support for products already purchased be handled?

SurModics is committed to a high quality of ongoing customer support with minimal, if any, disruptions.

BioFX will continue to support all BioFX products; the BioFX toll-free number for support is 1-800-445-6447; the email address for customer support is customerservice@biofx.com. 

SurModics will support all SurModics products; the SurModics toll-free number for support is 1-800-755-7793; the email address for customer service support is orders@surmodics.com.

What does this acquisition mean for SurModics and BioFX customers?

Both SurModics and BioFX customers can look forward to a more comprehensive portfolio of products and solutions.

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