Meridian Bioscience, Inc.

NasdaqGS:VIVO Stock Report

Market Cap: US$1.5b

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

Meridian Bioscience Past Earnings Performance

Past criteria checks 1/6

Meridian Bioscience has been growing earnings at an average annual rate of 25.3%, while the Medical Equipment industry saw earnings growing at 9.1% annually. Revenues have been growing at an average rate of 13% per year. Meridian Bioscience's return on equity is 11.5%, and it has net margins of 12.7%.

Key information

25.26%

Earnings growth rate

24.69%

EPS growth rate

Medical Equipment Industry Growth8.90%
Revenue growth rate12.95%
Return on equity11.54%
Net Margin12.75%
Last Earnings Update30 Sep 2022

Recent past performance updates

Recent updates

Seeking Alpha • Aug 05

Meridian Bioscience Non-GAAP EPS of $0.16 misses by $0.01, revenue of $67.8M beats by $1M

Meridian Bioscience press release (NASDAQ:VIVO): Q3 Non-GAAP EPS of $0.16 misses by $0.01. Revenue of $67.8M (+6.8% Y/Y) beats by $1M. Due to the pending transaction, Meridian will no longer hold conference calls to discuss its quarterly financial results and withdraws its previously issued financial guidance for fiscal year 2022, last updated on May 6, 2022.
Seeking Alpha • Jul 26

Meridian Bioscience: High-Probability Merger Arbitrage

This is a mid-cap going private transaction offering a 9% annualized return. US diagnostic test kit maker Meridian Bioscience is being taken private by a South Korean buyer consortium. I expect the transaction to close given strong strategic rationale while shareholder and regulatory approvals seem likely. The main risk is the DOJ’s ongoing investigation into the company’s blood lead tests. This is a recently announced going private transaction which seems highly likely to close. The spread of 1% seemed to reflect this upon the announcement but has since widened despite no transaction-related news and now stands at 4%. The merger is expected to close in Q4'22 which would imply a ~9% annualized return. A South Korean buyer consortium is acquiring US diagnostic test kit maker Meridian Bioscience (VIVO). The offer is $34 per share in cash or a total of ~$1.53bn. After the acquisition, two buyers - South Korean peer SD Biosensor (SDB) and a PE firm SJL Partners - will own 60% and 40% of the company. Overall, the merger makes strategic sense as SDB operates in the same industry and will be able to expand its broad product portfolio to the US. The announcement comes after a strategic review. VIVO shareholder and regulatory approvals will be needed, however these should not be a hurdle: VIVO's institutional shareholders (>50% stake) have a low cost-basis. Moreover, the transaction values VIVO at ~18x EV/TTM EBIT - close to its significantly larger peers, such as Qiagen (~19x), PerkinElmer (~20x) and Abbott Laboratories (~22x). Antitrust approvals are unlikely to be an issue - the companies have small market shares in all geographies. Meanwhile, CFIUS approval seems like a formality. The main risk here is the DOJ's ongoing investigation into the company's blood lead test products since 2018 due to their allegedly misleading test results. The merger announcement explicitly mentions "the absence of specified materially adverse outcomes" in the investigation as one of the closing conditions. The DOJ has issued several subpoenas to the company and currently the investigation is ongoing. No timeline has been provided. A positive is that VIVO has complied with all of FDA's requests and inspections on its blood lead test products so far. In August 2021, VIVO was issued a close-out letter from the agency, meaning that the company has addressed issues identified in the initial warning letter sent by the FDA in 2017. Yahoo Finance Business & Strategic Rationale VIVO is a life science company operating in the in vitro diagnostics (IVD) market. IVD are tests on samples of blood or tissue from the human body. The company produces 1) diagnostic test kits (Diagnostics segment) and 2) reagents used by other diagnostic test manufacturers (Life Science segment). Diagnostics historically contributed a higher revenue share (68% in 2019) but have seen a decline (40% in 2021) as Life Science revenues increased on the back of high demand for COVID-19 related reagents. Likewise, SDB operates in the IVD industry and has the same operating segments. Both companies have overlapping product portfolios, which include diagnostic test kits/reagents for respiratory, gastrointestinal and cardiovascular diseases, among others. In particular, immunoassay reagent offerings (i.e. antibody and antigen as opposed to molecular) are highly complementary. An important distinction here, however, is that VIVO generates ~45% of its revenues in the US compared to only ~7% of SDB's sales coming from North America. The buyer has stated that its product portfolio expansion to the US market is one of the underlying reasons behind the merger. In 2020, SDB formed a distribution agreement with Roche (RHHBY) and several of its COVID-19 test kits have been launched in the US. Now, the company is reportedly seeking US authorization for its other offerings, such as Standard M10 rapid COVID-19 test kits. In this context, the transaction seems highly synergistic given VIVO's distribution network and knowledge of domestic regulations. After the acquisition announcement, SDB hinted at building a new manufacturing plant in the US which points to the company increasing its distribution in the US. SDB has also highlighted its mass-production know-how as a synergy - reasonable given the company's size (~$3.4bn in market cap) and the fact that SDB is the world's largest COVID-19 test kit seller. Another benefit of the buyout - expansion of the molecular reagent/assay segment. VIVO's molecular offering segment has been generating a much higher share of total revenues - ~47% versus ~6% for SDB in 2021. Here it is important to note that this segment has higher margins than immunological/other non-molecular reagents/assays. Given SDB's scale manufacturing expertise, the company might very well pursue an expansion of VIVO's molecular testing segment. In its 2021 annual report, SDB also stresses that molecular diagnosis has high growth potential (8.4% CAGR from 2018 to 2023). Shareholders I see several reasons why shareholders will approve the transaction: Two of the largest shareholders - Blackrock and Vanguard (28% combined stake) - have accumulated most of their shares between 2010 and 2019. By my estimate, they will cash out on at least a 50% return if the transaction closes. Similarly, other equity holders - Earnest Partners, Impactive Capital, Royce & Associates and Renaissance Technologies - are also sitting on returns in the ballpark of 50%. Combined, these institutions have a 56% ownership stake. VIVO stock has rallied over the last year - 66% increase year-on-year before the merger announcement. This contrasts with broader sector performance - the Nasdaq Biotechnology Index (NBI) fell 23% over the same period. In my view, given the macroeconomic and industry environment, institutional shareholders will be willing to de-risk their investment in VIVO. Moreover, COVID has been a huge tailwind for the company - revenues rose 58% from 2019 to 2021 compared to low-mid single digits annual growth before. Now that the demand for COVID-related reagents and test kits is fading, shareholders could see this as a good exit opportunity. DOJ's ongoing investigation only adds to this incentive. Relative valuation (see below) shows that the transaction values VIVO in line with larger competitors. Regulatory Outlook CFIUS approval seems likely - VIVO and SDB's technologies/products are not unique or pose any national security concern. For reference, last year CFIUS approved Intel's NAND $9bn business sale to the South Korean memory chip supplier SK Hynix which is one of the largest semiconductor companies in the world. As the semiconductor industry appears to be under higher scrutiny than the IVD market, I expect CFIUS approval to be granted. Antitrust approvals are also not likely to present any issues - both VIVO and SDB have low market shares in all the geographies they operate in (see below). Admittedly, SDB is the world's largest COVID-19 test kit seller, however, VIVO has much lower revenues in this segment. Overall, the IVD market is dominated by large players - four giants Roche, Abbott (ABT), Danaher (DHR) and Siemens (SIEGY) controlled ~50% of the industry as of 2017. Company market shares in primary geographies (based on total IVD market revenues for 2021): Region VIVO SDB Total Market Revenues ($bn) North America 0.4% 0.3% 36.7 United States 0.4% 33.4 Europe 0.4% 5.2% 25.0 Asia 0.2% 2.8% 29.0 South Korea 0.2% 3.3% 4.5 Total 0.3% 2.2% 99.9 Sources: Company filings, Statista. Valuation VIVO identifies much larger companies - Becton, Dickinson (BDX), Cepheid (owned by DHR), Abbott and Thermo Fisher (TMO) - as its major competitors. This makes direct comparison somewhat complicated. That said, on an EV/EBIT basis the company seems to be valued fairly compared to most peers considering the size discrepancy.
Seeking Alpha • Jul 07

Meridian Bioscience downgraded at William Blair on $1.53B acquisition

In light of its acquisition by South Korea's SD Biosensor and SJL Partners for $1.53B, William Blair has downgraded Meridian Bioscience (NASDAQ:VIVO) to market perform. The consortium first made acquisition overtures on March 17 when the stock was trading at $25.67. The stock closed at $33.55 on Wednesday and the acquisition price values Meridian (VIVO) at $44 per share. Year to date, shares are up more than 60%. Analyst Brian Weinstein noted that Meridian (VIVO) has a clean balance sheet, generates cash flow, and has diagnostics growth drivers outside of COVID-19. The acquisition still needs to be approved by shareholders. In addition, there is an ongoing Department of Justice investigation into Meridian related to the accuracy of lead testing products made by Magellan Biosciences, which Meridian acquired in 2016.
Analysis Article • Jun 27

Meridian Bioscience (NASDAQ:VIVO) Has A Pretty Healthy Balance Sheet

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...
Seeking Alpha • Jun 26

Meridian Bioscience: Correctly Valued

Meridian saw a huge jump in earnings once the pandemic set in. Investors may worry that as the pandemic eases away, those earnings will also fall. I believe that worry is unfounded.
Analysis Article • Jun 09

Many Would Be Envious Of Meridian Bioscience's (NASDAQ:VIVO) Excellent Returns On Capital

There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a...
Seeking Alpha • Mar 14

Meridian Bioscience: Deceptively Priced

At first glance, shares of Meridian Bioscience look quite affordable, especially considering recent growth. But investors need to pay attention to the likely temporary improvement caused by the COVID-19 pandemic. Adjusting for this, the company looks much more expensive than it does initially and likely offers limited upside as a result.
Analysis Article • Feb 03

Meridian Bioscience (NASDAQ:VIVO) Looks To Prolong Its Impressive Returns

What are the early trends we should look for to identify a stock that could multiply in value over the long term...
Analysis Article • Jul 19

These 4 Measures Indicate That Meridian Bioscience (NASDAQ:VIVO) Is Using Debt Safely

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...
Seeking Alpha • Jul 08

If The COVID-19 Delta Variant Spreads This Fall, Meridian Is Still A Buy

A rapid increase in Delta variant spread in the world may be good news for Meridian's testing supply business. Meridian valuations are discounting the end of the U.S. pandemic this summer, which is far from certain going into the autumn. A sizable short interest position has been built in the first half of 2021, betting on a quick end to the pandemic globally. Delta's ability to wreak havoc in the lives of unvaccinated individuals and society at large is little understood in early July.
Analysis Article • May 10

Meridian Bioscience (NASDAQ:VIVO) Might Become A Compounding Machine

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...
Analysis Article • Mar 31

Meridian Bioscience (NASDAQ:VIVO) Seems To Use Debt Rather Sparingly

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that...
Analysis Article • Mar 11

Have Insiders Been Buying Meridian Bioscience, Inc. (NASDAQ:VIVO) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that...
Analysis Article • Feb 24

Investors Who Bought Meridian Bioscience (NASDAQ:VIVO) Shares A Year Ago Are Now Up 185%

It's been a soft week for Meridian Bioscience, Inc. ( NASDAQ:VIVO ) shares, which are down 19%. But that doesn't change...
Analysis Article • Feb 09

Need To Know: Analysts Are Much More Bullish On Meridian Bioscience, Inc. (NASDAQ:VIVO) Revenues

Celebrations may be in order for Meridian Bioscience, Inc. ( NASDAQ:VIVO ) shareholders, with the analysts delivering a...
Analysis Article • Jan 27

Should We Be Excited About The Trends Of Returns At Meridian Bioscience (NASDAQ:VIVO)?

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly...

Revenue & Expenses Breakdown

How Meridian Bioscience makes and spends money. Based on latest reported earnings, on an LTM basis.

Earnings and Revenue History

NasdaqGS:VIVO Revenue, expenses and earnings (USD Millions)
DateRevenueEarningsG+A ExpensesR&D Expenses
30 Sep 22333428824
30 Jun 22344439024
31 Mar 22339628624
31 Dec 21313608024
30 Sep 21318717624
30 Jun 21306717625
31 Mar 21327877625
31 Dec 20299707425
30 Sep 20254467124
30 Jun 20240446822
31 Mar 20204216420
31 Dec 19197196119
30 Sep 19201246218
30 Jun 19203266216
31 Mar 19207276416
31 Dec 18213266816
30 Sep 18214247017
30 Jun 18210246918
31 Mar 18209186817
31 Dec 17206226617
30 Sep 17201226316
30 Jun 17198216315
31 Mar 17199306315
31 Dec 16195306114
30 Sep 16196325914
30 Jun 16195355813
31 Mar 16192365513

Quality Earnings: VIVO has a large one-off loss of $21.2M impacting its last 12 months of financial results to 30th September, 2022.

Growing Profit Margin: VIVO's current net profit margins (12.7%) are lower than last year (22.5%).

Free Cash Flow vs Earnings Analysis

Past Earnings Growth Analysis

Earnings Trend: VIVO's earnings have grown significantly by 25.3% per year over the past 5 years.

Accelerating Growth: VIVO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VIVO had negative earnings growth (-40.5%) over the past year, making it difficult to compare to the Medical Equipment industry average (3.7%).

Return on Equity

High ROE: VIVO's Return on Equity (11.5%) is considered low.

Return on Assets

Return on Capital Employed

Discover strong past performing companies

7D

1Y

7D

1Y

7D

1Y

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2023/02/01 01:10
End of Day Share Price 2023/01/30 00:00
Earnings2022/09/30
Annual Earnings2022/09/30

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Meridian Bioscience, Inc. is covered by 12 analysts. 2 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Catherine Ramsey SchulteBaird
Mark MassaroCanaccord Genuity
David WestenbergCL King & Associates, Inc.