Haemonetics Corporation (HAE), Pall Corporation (PLL), Grifols SA, Barcelona (GRFS): One Blood Management Company for Red-Hot Returns

Haemonetics acquired the blood-collection business of Pall Corporation (NYSE:PLL) for $550 million. Haemonetics’ blood collection products use blood filtration equipment, and the Pall Corporation (NYSE:PLL) acquisition brought the filter in house to provide some level of vertical integration and reducing the manufacturing cost of producing filter equipment. Pall Corporation (NYSE:PLL)‘s existing and under-development products are expected to help Haemonetics launch its automated whole blood collection system in the next few years. This will provide growth opportunities in the manually handled whole blood market. The acquisition is expected to increase revenue 70% year-over-year to $48 million in the second quarter of fiscal year 2014.

Pall Corporation (NYSE:PLL) will deliver manufacturing assets to help launch Haemonetics’ automated whole blood collection system in 2016. In the short term, the acquisition increased Pall Corporation (NYSE:PLL)‘s life sciences revenue from $318 million in the third quarter of 2012 to $326 million in the third quarter of 2013.

In addition to Pall Corporation (NYSE:PLL)‘s acquisition, Haemonetics accomplished the acquisition of Hemerus Medical, a whole blood collection company, in April for $24 million. This acquisition will provide Haemonetics with a unique capability in the whole blood market because of SOLX technology. Hemerus developed SOLX, a specialized red blood cell storage technology that extends the life of red blood cells. According to the FDA, red blood cells can be stored for up to 42 days, and SOLX can extend this storage period to 56 days. This extension of the storage period will make blood donations viable for a longer period, allow easier inventory management of red blood cells, and minimize wasting blood.

Conclusion
Haemonetics’ whole blood segment will prove to be a long-term growth driver for the company because of its acquisition strategies. The plasma market is also a potential revenue generator for the company. I believe that the company’s stock price will continue to rise in upcoming years because of these strategies.

The article 1 Blood Management Company for Red-Hot Returns originally appeared on Fool.com and is written by Madhukar Dubey.

Madhukar Dubey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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