The company said it has a very small market share in a ‘large and growing market’.
It added industry is split between very large players (with hundreds of millions in revenue) and smaller private firms which creates an opportunity to fill the void in the ‘mid-market’.
Combined businesses FY18 forecast to deliver in excess of $33m revenue and in excess of $7.3m underlying EBITDA with 22% EBITDA margin.
Analytica has 70 technical and operational lab staff and forecasts to deliver revenue of A$11m and EBITDA of A$4m in FY18.
HRL said the deal would provide rapid entry into the high value environmental and food/agriculture testing market and build on primary business segments in field sampling, laboratory analysis and technology/reporting.
It is also an opportunity to provide pre-shipment certification testing from New Zealand to the Chinese market.
Analytica is a privately owned analytical chemistry lab business in Hamilton, New Zealand, specialising in mass spectroscopy analysis to the milk, honey and environmental markets.
Dairy and food origin tests include QAC and detergent residues and Aflatoxin M1.
Honey tests are Manuka 3-in-1, Leptosperin, Tutin, C4 sugars, colour/conductivity, heavy metals, DHA and residues.
Dr Terry Cooney founded the company in 2011 with the goal of building a chemistry lab to disrupt the market. Dr Terry Braggins and Steve Howse joined after as executive directors and equity partners.
JV and China links
CAIQTestPacific is a joint venture led by Analytica (26% interest) and supported by the Chinese Academy of Inspection and Quarantine.
It was established to help the export of goods from New Zealand, Australia and the Pacific to China.
The JV services the dairy export market, which experiences substantial delays with custom and quarantine when arriving in China and awaiting testing.
CAIQtest Pacific can test export product locally before shipping to China assisting with supply chain bottlenecks.
In August it achieved accreditation with International Accreditation New Zealand (IANZ), Ministry of Primary Industries and the Chinese National Accreditation Service and can now market services to commercial dairy exporters.
China’s infant formula registration rules will be implemented on 1 January 2018.