Biopool Awaits OK of Source Scientific Merger
Michael D. Bick, chairman and chief executive of Biopool International Inc. in Camarillo, said he expects his biotech company to double its revenues next year, if a merger agreed to last week is approved.
In what would be the largest acquisition in the public company’s seven-year history, Biopool is set to take over Source Scientific Inc. of Garden Grove.
For the 1994-95 fiscal year ended Sept. 30, Source Scientific lost $400,000 on sales of $5 million, in contrast to a loss of $2 million on sales of $5 million the previous year. Source Scientific has 57 employees.
In the transaction, shares of Biopool’s common stock will be exchanged for Source Scientific stock, with Biopool issuing an additional 3 million new shares. Biopool stock is listed at $69.7 per share. Source Scientific is at 75 cents.
The deal must be approved by both companies’ shareholders and by the Security Exchange Commission before it is finalized, a process that could take up to five months, said Bick. Biopool manufactures chemicals used by hospitals and clinical laboratories to help diagnose blood, vascular and other disorders, as well as to detect drug abuse. Source Scientific makes the chemical analysis devices used in these tests.
“It’s like the example of the razor and the razor blade [companies] coming together,” said Bick. “Biopool’s revenues were $6.5 million in 1995. In 1996 we’ll be looking at $12 million to $13 million.”
Biopool reported net income of $484,902 on sales of $4,977,749 for the first three quarters of 1995, as compared to a net income of $549,198 on sales of $4,058,124 for the same period last year.
“They have been undergoing restructuring and have been burdened by the debt of that restructuring,” Bick said. “But they’ve turned themselves into a break-even operation.” Richard Sullivan, president and chief executive officer of Source Scientific, said he was looking forward to completion of the merger.
“Eighty percent of our business is medical, with some crossing over into environmental testing--testing for pesticides in soil and food contamination, which is a growing market. Biopool will enable us to become much more competitive,” he said. “We’ve had four or five years with previous owners who misdirected this company.”
Microprobe Corp., a Washington-based biotech company, owned Source Scientific from 1991 to 1994. In 1994, Source Scientific became a division of the financially troubled biomedical company, the Alton Group of Irvine. The Alton Group later changed its corporate name to Source Scientific.
