Update 1:58 p.m.: Ann Arbor's HandyLab acquired by medical device firm in $300 million deal
Ann Arbor medical devices firm HandyLab, a promising technology company often held up as a bright spot in the local economy, was acquired today by New Jersey-based medical devices manufacturer Becton, Dickinson and Company. Sources said the deal is worth close to $300 million, although the companies wouldn't release details of the transaction.
HandyLab, a University of Michigan spinoff that employs about 60 people in Pittsfield Township, will maintain its local operation and the company's management, BD spokeswoman Colleen White said.
BD, which has some 29,000 employees in 50 countries, reports revenue of about $7.2 billion. The firm, which has a Detroit facility, expects to finish the acquisition later this year. Officials declined to release terms of the deal.
HandyLab CEO Jeff Williams played an instrumental role in developing the company - founded by U-M grads Kalyan Handique, known as "Handy," and Sundaresh Brahmasandra - since joining it in 2004. He said the deal would allow HandyLab to expand distribution of its lead product.
"They can help us expand the distribution very rapidly," Williams said. "It's a good outcome for our shareholders, for our employees and for our customers."
The acquisition marks a significant victory for the Michigan venture capital community. Ann Arbor VC firms Ardesta, EDF Ventures, Arboretum Ventures and the student-run Wolverine Venture Fund financed the company before outside investors came along.
"It's a big win for everybody," said Jan Garfinkle, managing director of Arboretum, which funded the company in 2004 and owns a 10 percent stake. "The Michigan venture capital funds were absolutely 100 percent key to the financing of this company."
HandyLab chairman Rick Snyder, CEO of Ardesta, funded HandyLab, shortly after EDF and the Wolverine Venture Fund helped the company get on its feet in 1999. He wouldn't disclose the details of
Ardesta's ownership stake. The deal comes 12 months after Ann Arbor-based HealthMedia, which had funds from Ardesta and Arboretum, was acquired by Johnson & Johnson.
Snyder, also a Republican gubernatorial candidate, said HandyLab's Michigan venture capital funding was crucial to its inception.
HandyLab in 2008 acquired $19.2 million in venture capital, adding to some $40 million previously secured.
"It never would have been created" without the VC funding, Snyder said. "If it would’ve gotten going, it probably would have moved.It's an outstanding opportunity of the success that we can have in Michigan."
The viral potential of HandyLab's "Jaguar" device, which helps doctors quickly identify infections, could eventually lead to additional manufacturing, technology and sales jobs in Ann Arbor.
"It is going to revolutionize how infections are detected, both the speed at which they're detected and the accuracy," Garfinkle said.
The acquisition adds to BD's growing molecular diagnostics portfolio.
"We have a big presence in molecular diagnostics and they’re bringing a flexible, automated platform that adds" to BD's technology, White said.
Stephen Rapundalo, executive director of Ann Arbor-based MichBio, the state's life sciences association, said the diagnostic devices industry represents opportunity for Michigan.
"I think that’s a subsector of the industry is definitely growing here," Rapundalo said. "I hope that BD will recognize the talent that’s here in the area and make the correct decision to keep HandyLab and expand the company here."
Williams said BD is incentivized to keep HandyLab in Ann Arbor because of the company's talent.
"A lot of what they're buying is corporate knowledge that's invested in our people," Williams said. "It's pretty complex technology that's quite specialized. We've over the years built up a lot of capability here in Ann Arbor that really has to stay put."
The acquisition comes seven months after HandyLab expanded its footprint in Pittsfield Township by taking over 4,500 square feet of space in its South State Street building. The move means HandyLab now leases the entire 22,000-square-foot building at 5230 S. State St.Elizabeth Parkinson, director of marketing and public relations for economic development group Ann Arbor SPARK, said HandyLab's acquisition shows the power of the local venture capital industry and entrepreneurial community.
"For the entrepreneurial ecosystem in the region and in the state, it's very, very positive," Parkinson said.
AnnArbor.com Business News Director Paula Gardner contributed to this report.