Life Technologies jumps on strategic review

Life Technologies Corp. said Friday that it retained two banks to conduct a strategic review, and its shares jumped to an all-time high.

The life science and medical research instrument maker said Deutsche Bank Securities and Moelis & Co. will assist in its annual strategic review. Life Technologies said it has not decided on any course of action.
Companies sometimes hire bankers to find ways to unlock shareholder value, which can result in the spinoff of a division or even the sale of the whole company.

Shares of Life Technologies jumped $5.68, or 10.3 percent, to $60.65 in afternoon trading. The stock has climbed 33 percent since July 10 and reached an all-time high of $62 in morning trading.

Life Technologies offers biological technology including DNA synthesis, protein analysis, stem cell tools and chemicals used in forensics and food safety. Based in Carlsbad, Calif., it was formed in November 2008 through the combination of Invitrogen Corp. and Applied Biosystems Inc. Over the first three quarters of 2012 Life Technologies' revenue grew 1 percent to $2.8 billion.

Cantor Fitzgerald analyst Sung Ji Nam said it's not clear why Life Technologies is reviewing its options at this point. She said the company has generally been viewed as an acquirer buying other companies instead of an acquisition target. Nam wrote that Life Technologies shares have been doing well, as have stocks in the life science industry generally. She added that Life Technologies' profit margins have been good and its growth could pick up in 2013/

Despite the solid performance of Life Technologies shares, Nam said the stock is inexpensive compared to the company's profits and its free cash flow may make it attractive to potential acquirers.

Jefferies & Co. analyst Jon Wood said he thinks $50 to $60 per share is a reasonable price range for Life Technologies it if is acquired in a leveraged buyout.

The company is scheduled to report fourth-quarter results after the market closes on Feb. 4.