Animal safety and genomics company Neogen has acquired Brazil-based genomics lab Deoxi Biotecnologia for an undisclosed sum.
The acquisition will allow the company to perform genetic testing for Brazilian livestock farmers locally. Previously, Neogen was shipping samples from Brazil to its laboratory in Nebraska for testing.
Herbert described Brazil as a “critical” market for the company’s expansion, because of its vibrant livestock industry. Globally, the South American country is second only to the US in beef production, and it is home to more than double the number of cattle in the US. Brazil is also a significant exporter of pork and chicken.
Neogen claims its DNA tests can predict weight, pregnancy rate, calving ease and susceptibility to disease in cattle. In addition to its genetic testing services, the company produces pharmaceuticals, veterinary instruments, diagnostics, wound care and disinfectants for the livestock sector.
“Deoxi has excellent facilities, and an excellent reputation with its customers, which include research institutions, universities and animal breeding companies,” said Neogen chief executive James Herbert. “Adding Deoxi’s complementary expertise and customer base strengthens our animal genomic capabilities and presence.”
The worst recession to hit Brazil in decades has depressed domestic consumption and dried up financing. As a result, valuations for Brazilian companies have been pushed down and M&A is increasingly seen as a means of gaining liquidity.
“There are a lot of assets for sale now; very good assets that you would never expect to be for sale,” said Marcus Silberman, co-head of M&A for Latin America at Bank of America Merrill Lynch, at a Brazilian American Chamber of Commerce event last month.