On 7 February 2019, ALS Limited (ASX: ALQ), a company from commercial & professional services industrial group providing laboratory testing, inspection, certification and verification solutions, announced the completion of separate strategic acquisitions in the USA and Chile and its key investment in innovation worth A$51 million. ALQ has acquired BioScreen Testing Services, located both in Los Angeles and Phoenix and MARRS International in Valparaiso, Chile.
BioScreen Testing Services is a pharmaceutical and personal care testing centre with over 110 staffs. It is engaged in works like pharmaceutical and personal care testing. ALS Limited will be able to complement its existing life science businesses related to pharmaceutical testing and will also be able to focus on the supply chain businesses for over the counter and prescribed pharmaceuticals in regions of Australia, the UK, Europe and South America.
The company had also acquired MARRS International, based in Valparaiso, Chile. MARRS International is into the business of inspection, certification and control services. Through the acquisition of MARRS International, ALS limited has now made an addition to its Commodity Inspection portfolio. The company believed that through this acquisition, it could enhance its existing service offering to customers at both ends of major mining, refining logistical routes and commodity trading. The MARRS International’s established networks of operation in important port and mining locations are of strategic importance to ALS Commodity Inspection and will also help ALQ to expand its footprints in the Commodity Inspection sector in South America and beyond its existing markets in the UK, China, Africa and Europe.
At the same time, ALS Limited also acquired a stake in RedEye, which is a technology company based in Brisbane with its offices in the US, which is into the business of providing cloud and mobile solutions for asset and work management. The collaboration of RedEye with ALS Limited will enable ALS to develop data management solutions within the asset integrity and reliability services sector.
Mr Raj Naran, who is the Non-Executive Director of the company stated that the acquisition of BioScreen and MARRS International are in line with the execution of the company’s strategic plan for 2022. Through the acquisition of BioScreen, the company would be able to create wealth opportunities around the world for the already existing ALS Life Sciences business.
On 24 January 2019, the company highlighted in the business presentation about its strategic priorities for achieving FY2022 targets. The cost base management and automation, LIMS and technology, development of talent and staff and integrated business services across all business streams are the strategic focuses for the company till FY2022
The presentation reflected that testing was the core focus of the company, the strategic priorities of the company towards the Brand recognition, achieve operational excellence, remain focused on its clients and leverage services throughout various business streams.
The company would maintain a balanced portfolio where the target of the company would be to generate more than 50% of the company EBIT above mineral cycle by increasing the existing market share, looking for many new business streams, geographical expansion and by Bolt-on acquisitions.
Since, the inception of ALQ on ASX, the stock has generated a positive performance of 249.29%. The YTD performance of the stock is 15.34%.
At present, the market price of ALQ on ASX is A$7.600 (as on 8 February 2019), down by 0.913% as compared to previous trading day’s closing price. The stock has a market capitalization of A$3.73 billion with approximately 486.76 million outstanding shares and a PE ratio 25.89x.
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