Haemonetics' Plant Sell-Off To CLS Plasma To Be Strategic Fit

Haemonetics Corporation (NYSE:HAE) recently entered into a strategic asset sell-off agreement with CSL Plasma Inc. The former has announced that it willtransfer its ownership of Haemonetics' Union, SC manufacturing facility, operating assets and certain inventories to CSL Plasma. The transaction is expected to be completed in the current quarter, subject to fulfilment of certain customary closing conditions.

According to Haemonetics, this impending divestment remains integral to the company’s asset optimization strategy that aims at improving its operating performance and focusing on core competencies.

Haemonetics' Union, SC manufacturing facility produces liquid saline and sodium citrate, which are solutions used in the plasmapheresis or plasma collection process. Per the terms of the deal, on the transaction’s closure, the ownership and operational control of the facility including property and equipment will be transferred to CSL Plasma. Further, approximately 200 Haemonetics employees, currently working in the Union, SC plant will get an opportunity to be inducted to CSL Plasma workforce.

Haemonetics Plasma Business at a Glance

Going by MarketWatch Data, the global Blood Plasma market holds immense potential and is projected to register strong growth seeing a CAGR of 10.18% during the 2018-2023 period.

Haemonetics has been witnessing a solid uptrend in the Plasma franchise for quite some time. In the global plasma market, Haemonetics holds 80% shares approximately. In fiscal 2019, the plasma continued to witness a sturdy progress, driven primarily by robust demand for disposables in North America.

Haemonetics is currently observing plasma market growth above historic rates, attributable to an industry striving to double its collections by 2025 and the spurt in demand for plasma-based medicines. Per management, NexSys is the best-positioned platform to support this industry growth. Further, pricing from NexSys PCS and strength in liquids have started contributing to the top line. The company is advancing well with the development and launch of NexSys PCS plasmapheresis system.

Earlier, Haemonetics projected fiscal 2020 organic revenue growth in the band of 11-13% under its Plasma arm.

Share Price Performance

Over the past three months, shares of Haemonetics have outperformed its industry. The stock has surged 30.5% against the 0.3% dip of the industry.

Zacks Rank & Other Key Picks

Haemonetics sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the broader medical space are Cerner Corporation (NASDAQ:CERN) , Penumbra (NYSE:PEN) and Bruker Corporation (NASDAQ:BRKR) . While Cerner sports a Zacks Rank of 1, Penumbra and Bruker carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cerner’s long-term earnings growth rate is expected to be 13.5%.

Penumbra’s long-term earnings growth rate is projected at 21.5%.

Bruker’s long-term earnings growth rate is estimated at 11.7%.

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