Bio-Techne Corp

Bio-Techne (TECH) outperformed after announcing that it would be acquired by a larger competitor. This acquisition highlights the company's strong position in the market and its durable competitive advantages. The Fund's focus on companies with such advantages allowed it to benefit from this volatility, reinforcing the belief in Bio-Techne's growth prospects as a key player in the AI-driven landscape.

Life science company Bio-Techne’s (TECH) shares were up following an all-cash takeout offer from Merck KGaA. This indicates strong market interest and potential value realization for shareholders, suggesting a favorable outlook for the company in the current investment climate.

Bio-Techne is a market-leading life sciences reagents and instrument company with a strong business model characterized by recurring consumable revenue, robust profit margins, and healthy free cash flow. Despite current pressures from concerns around US academic funding, which have driven the stock to its lowest valuation since 2017, the company is expected to see a revenue growth inflection in FY '27 as it laps a one-time NIH budget reset. The recent M&A activity in the sector indicates that Bio-Techne is a coveted asset, suggesting that its current valuation is significantly undervalued compared to its potential.

Bio-Techne is a market-leading life sciences reagents and instrument company with a strong business model characterized by recurring consumable revenue, robust profit margins, and healthy free cash flow. Despite current pressures from concerns around US academic funding, which have driven the stock to its lowest valuation since 2017, the company is expected to see a revenue growth inflection in FY '27 as it laps a one-time NIH budget reset. The recent M&A activity in the sector indicates that Bio-Techne is a coveted asset, suggesting that its current share price does not reflect its true value.

Bio-Techne Corp. has faced challenges due to federal funding cuts for scientific research, which have negatively impacted life sciences companies, including Bio-Techne. However, the manager expresses confidence in the long-term need and desirability of scientific research efforts and acknowledges the role that Bio-Techne plays in achieving these goals.

In the first quarter of 2025, we continued to build a position in Bio-Techne as part of our life sciences investments. Despite the industry-wide downturn, we see potential in Bio-Techne and are optimistic about its future performance. The company is well-positioned to benefit from ongoing advancements in life sciences, and we believe it will recover as market conditions improve. Our commitment to Bio-Techne reflects our confidence in its long-term growth prospects.

In the first quarter of 2025, we continued to build a position in Bio-Techne as part of our life sciences investments. Despite the industry-wide downturn and funding cuts to federal health agencies, we see potential in Bio-Techne's business model and its ability to navigate these challenges. Our strategy involves reallocating capital to companies like Bio-Techne that we believe can perform well in the long term, even amidst current pressures in the sector.

The demand environment for life sciences remains in flux, but we remain confident in the long-term opportunity for Bio-Techne. Despite near-term uncertainty due to cuts to federal health agencies and research grant funding, we believe the company is well-positioned for future growth. We added to our position in Bio-Techne this quarter, reflecting our belief in its potential amidst the challenges faced by the industry.

Bio-Techne (TECH) has faced challenges due to negativity around the funding environment for biopharmaceuticals and biotech research, particularly in light of recent federal funding cuts and a weak venture capital funding environment. However, we have taken advantage of the recent weakness to add to our Bio-Techne position, indicating our belief in its long-term potential despite current headwinds.

The demand environment for life sciences remains in flux, but we remain confident in the long-term opportunity and added to Bio-Techne this quarter. Despite near-term uncertainty due to cuts to federal health agencies and questions around research grant funding, we believe that Bio-Techne's strong position in the life sciences sector will allow it to capitalize on future growth opportunities.