Dan Arias: It’s less about the details and the financials and more just about the rationale. Can you speak to whether this is a deal where you just felt like the price is right to your point earlier or one where the diligence led you to a point where you felt like you were comfortable either with the legal side of the equation or the technical side of the equation and work around for some of the problems that are actually leading to the legal side. Can you just talk a little bit about how comfortable you got with the deal? Because obviously, it is a controversial one. Thanks a bunch.
Frank Laukien: Yeah, so probably the answer is no, because I don’t want to talk about any of the litigation and all of these other things. But strategically, having a much bigger play in spatial biology with being able to acquire at a very reasonable valuation one of the two leaders in spatial transcriptomics is an unbelievable strategic opportunity. That’s completely what drives this deal. We’re very pleased with their gene expression and counter-profiling business. We think that has some growth opportunities. It has good margins, wonderful. But the driver was spatial transcriptomics. So the GeoMx and CosMx and related product, software and other product lines. And that is a really big deal if you want to be a leader in spatial biology.
We have a complementary but much much smaller spatial proteomics business with Canopy. They really are in adjacent markets. They don’t really overlap. They’re also — what NanoString is doing is, a hundred times larger. So this really puts us on the map in spatial transcriptomics. We like their plexing capability, a lot of research customers, that’s really what they want, they’re far ahead and I think they’re pretty fundamentally ahead in spatial transcriptomics. So, they’re one of the pioneers and we want to continue to support their customers in doing their fundamental and then very much also the translational clinical research where these spatial single cell transcriptomics tools are so needed for biomedical research and that’s a — in addition to proteomics and structural biology, glycoproteomics, spatial biology in there, the bigger field is spatial transcriptomics and we had no presence in that.
So for us this is a huge opportunity, and we seized it.
Dan Arias: Okay. Appreciate you indulging me on that. And then I guess just the natural next question or one of them anyways is, are you still on the hunt for deals? Are they likely to do additional M&A from here? Thank you much.
Frank Laukien: I think we’re going to be in the deal diet for a little while. I mean there’s always small deals that come through, , sometimes that a lot of the smaller deals sometimes some of them at $5 million or $10 million in revenue and some of them were literally addressing gaps that we had in our product line in preclinical imaging or in Raman process analytical technology or high-end Raman microscopy, those are things that we’ve been eyeing for many years and sometimes more than a decade and when some of the companies then became available that fit perfectly into our optics or into our BioSpin preclinical imaging, we said, wow this is great and yeah it all comes at the same time. Whereas two years ago, it was very difficult with valuations then to agree on anything.
So we are value conscious, we are ROIC conscious. And so yeah, this is a — but in terms of larger deals, we obviously need to — we do wish to then de-lever for a while and that’s — I think that’s the answer on larger deals. I would not expect any additional larger deals until we de-lever some.
Dan Arias: Thank you, Frank.
Frank Laukien: You’re welcome, Dan.
Operator: [Operator Instructions] Our next question comes from Josh Waldman from Cleveland Research. Please go ahead with your question.
Josh Waldman: Hey, good morning, guys. Thanks for taking my questions. I’ll ask two and then hop off. First, Frank, can you comment on year-over-year orders in DSI and 1Q and whether the guide assumes any sequential improvement in order rates from here? I guess just more context on how you’re thinking about the order cadence to support the full year organic guide would be helpful. And then for my follow up, Frank, again, wondered if you could comment or provide more context on the moving pieces within the CALID business. Maybe more color on the revenue slippage. You mentioned tougher comps. I can’t help but notice you didn’t highlight timsTOF this round. Yeah, I guess just any more context you’re being on the order front. How you’re thinking about timsTOF growth and any other kind of one-off or one-time pressures the segment may have seen this quarter.
Frank Laukien: Yeah, so trying to take as many of the questions. So, bookings, I think we expect the normal seasonality that we have with bookings always weakest in Q1, strongest in Q4, and in between in Q2, Q3, they tend to be more comparable in terms of booking. So that’s what we expect this year as well. So normal booking seasonality to where, to your first question, I think would imply a sequential step up, not only revenues and margins, which we’ve mentioned, but also in bookings throughout the remainder of the year. timsTOF, I did mention, of course the 4D proteomics and immunopeptidomics and glycoproteomics, that’s all. There was a picture of a timsTOF Ultra, that’s all in the timsTOF platform. Very significant workflow and software and capabilities increases that we showed at the US HUPO meeting in March.
We have an ASMS around the corner, right, that’s coming up in the second week of June in Anaheim. So that’s obviously a biggie in the mass spec world and timsTOF is doing well. And the many platforms and the many new capabilities, it’s just such a beautiful platform. As you peel the onions, there’s not only proteomics and then maybe plasma proteomics or single cell proteomics and now there’s middle down, top down. There is intact. There are these immunopeptidomics and unique PTMs and glycoproteomics. There’s protein-protein interactions. It’s such a rich field that one really now has to look at like a dozen subfields that all constitute proteomics and related fields, and the instrument is very, very suitable for that and along with new wetware consumables, with new software, with new workflows, so plenty going on there.
Josh Waldman: Frank, I guess just on the revenue slippage, was that timsTOF or is it something else within CALID?
Frank Laukien: No, it was also not only CALID and also with semiconductor metrology tools. Sometimes when one of these facilities by one of our large semiconductor metrology tools gets slips by a quarter or two and those very large customers that you all know by name tell you know, they’ll ship that in March, ship that in, whatever, and Q2 and stuff like that. So some of that was that. Some of that was NMR and preclinical imaging, MRI related. So this wasn’t just — this was not just on CALID, but CALID had a very strong pump year-over-year, I think, one of the strongest.
Justin Ward: And Q4, there was quite a bit pull forward into Q4, including within, for example, the optics business, which is within CALID. So those cause quite a distortion and is the primary driver of the lower organic growth in the first quarter.
Frank Laukien: Correct.
Josh Waldman: Got it. Okay. Appreciate it, guys.
Justin Ward: All right, operator, I think we’re all set with questions. So we want to thank everyone for joining us today on the call. Bruker’s leadership team looks forward to meeting with you at an event or speaking with you directly during the second quarter. Please feel free to reach out to me to arrange any follow ups. Have a great day.
Operator: Ladies and gentlemen, with that, we’ll conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.
