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Symyx spends $123 million to buy MDL’s assets from Elsevier
SANTA CLARA, Calif.—October 2, 2007—Symyx Technologies announced it closed its acquisition of MDL Information Systems from Elsevier for $123 million in cash. To support working capital requirements as well as future growth initiatives, Symyx has also established a $25-million back-up line of credit.
SANTA CLARA, Calif.—In a move designed to make it a leading player in the life science informatics market, Symyx Technologies announced last month that it had signed a definitive agreement to acquire the bulk of the assets of MDL Information Systems from scientific publisher Elsevier for $123 million in cash. The deal also highlights a strategic shift for Elsevier, as it looks to focus more on content and productivity tools, as opposed to workflow and analytical software.
Once the sale is completed, expected before the end of the year, Symyx will acquire MDL's ISIS and Isentris platforms, as well as MDL Draw, MDL Direct, Available Chemicals Directory (ACD) and DiscoveryGate. For its part, Elsevier will retain rights to certain data and content properties including the CrossFire Beilstein, Pharmapendium and Patent Chemistry databases in addition to its ScienceDirect, Scopus, and Embase products. Both companies have agreed to an ongoing relationship that will continue to make Elsevier's database products available through future MDL offerings.
According to Isy Goldwasser, CEO of Symyx, this acquisition signals his belief of the central role informatics plays in the life science and chemical markets and should complement the company's tools and service divisions.
"What we are trying to do is position ourselves be one of the handful of vendors that life science companies and chemical companies talk to when they look at major initiatives to outsource or to restructure and increase efficiencies and speed to market," Goldwasser says. "To do that you need to have a scale and reach that we just didn't have before this acquisition."
The reach he refers to is the well established customer base for MDL products that numbers more than 1,000 companies and 50,000 users worldwide. This breadth should provide a solid base from which Symyx can leverage additional sales of its electronic lab notebook (ELN) offering. Prior to picking up MDL, Goldwasser estimates that 25 to 30 percent of Symyx's total 2006 sales of $124.9 million were in the life sciences space, with roughly half of that portion derived from software sales. Post acquisition, he says, total company revenue derived from life sciences could be as high as 60 percent.
But aside from broadening its software sales, Goldwasser sees opportunity for the sale to provide a boost to the company's tools and service businesses as well.
"MDL's core base is in discovery chemistry which is affiliated of course with medicinal chemists," he notes. "We have an ELN offering for discovery chemists, but that is the area where we face the strongest competition in the market from CambridgeSoft. With MDL, we will have a much stronger position in the area of discovery, which should allow us to penetrate much faster and better with our software and also with some of our tools.
"What this does is create the largest R&D informatics business for the life sciences and chemical industries."
At Elsevier, the disposition of the MDL assets comes as the global information and publishing giant continues to refocus on its core mission: that of a provider of data and information. As part of the rejiggering, the retained properties from MDL will be under the company's science and technology division.
"Our customers are [information] agnostic, they just want to get to the answer," says Martin O'Malley, managing director, corporate markets, Elsevier Science & Technology. "The whole area of productivity tools is something where we have to become much more open in terms of how we integrate our content into either tools we develop ourselves or tools of others and that is a key thrust for us in the future.
"Even though we are obviously focused on growing our existing content and developing new content, the next phase is how we plow that content into workflow in both the corporate markets and government and academic markets."
O'Malley also points out that the ISIS and Isentris platforms of MDL, compete with many other companies Elsevier currently works with. "We want to play with as many partners as we can, including Symyx and MDL," he points out. "This will make it much easier for us to do that."