Ladies and gentlemen, thank you for standing by. Welcome to the Brooks Automation Business Update. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star-zero. As a reminder, this conference is being recorded Wednesday, September 26th, 2018. I would now like to turn the conference over to Lindon Robertson, Executive Vice President and Chief Financial Officer. Please go ahead, sir.
Thank you, Beatrice. Good morning, everyone. Welcome to this Brooks Automation conference call. We scheduled this call to share additional color on the definitive agreement we entered yesterday to purchase the GENEWIZ business. If you've not seen it, the press release was posted on the investor relations page of our website, www.brooks.com. We've also posted the illustrated PowerPoint slides that will be used to support our prepared comments during this call. I would like to remind everyone that during the course of the call, we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are many factors that may cause actual financial results or other events to differ from those identified in such forward-looking statements.
I would refer you to the section of our earnings release titled Safe Harbor Statement, the Safe Harbor slide on the aforementioned PowerPoint presentation on our website, and our various filings with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented here today. In the course of discussion, we may make reference to non-GAAP financial measures, which are sometimes used in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP measures provide an additional way of viewing aspects of our operations performance, but when considered with GAAP financial results and the reconciliation of GAAP measures, they provide an even more complete understanding of the Brooks business.
Non-GAAP measures should not be relied upon to the exclusion of the GAAP measures themselves. On the call with me today is our Chief Executive Officer, Steve Schwartz. We will open with his remarks on the signed agreement and the rationale. I will then provide additional color on the agreement and our steps moving forward. Following our prepared remarks, we will take some questions from the phone lines. During our prepared remarks, again, we will make reference to slides I mentioned available to everyone on the investor relations page of our Brooks website. With that, I now turn the call over to our CEO, Steve Schwartz.
Thank you, Lindon. Good morning, everyone, thanks for joining us today, especially on such short notice. It's only a few weeks since our last call together, but we're moving quickly, and we're pleased to announce to you that with the acquisition of GENEWIZ, we've made yet another significant advance in our strategic roadmap. As many of you are aware, we're effecting a persistent and dramatic transformation of Brooks to focus on high-growth, high-value segments of two important technology markets, semiconductors and life sciences. The changes that we've undergone since the days when we were solely a semi cap equipment critical subcomponent manufacturer have been significant. Yet, we believe that we're now entering the phase when we have both resources and expertise to accelerate our growth and profitability.
We've grown a $200 million life sciences business with a unique business model. Today we announce the addition of a sizable, profitable, highly capable strategic addition to our valuable sample management business. At our June Analyst Day, we laid out for you our life sciences strategy to build out our cold chain sample management capabilities. Currently, we care for tens of millions of samples through our outsourced sample management services business. Hundreds of millions more samples are safely ensconced in our large automated stores worldwide. In addition to stores and storage revenue, each of these samples provides us with opportunities to add value through consumable tubes, vials, and plates for formatting, informatics and transportation services to ensure precise location and relocation of samples. To date, some laboratory services.
Our plan is to continue to add more high-quality samples under our care and to compound the value by adding more value-added services to those samples. Toward that end, one of the most significant dynamics in life sciences, which has fueled the large number of biological sample collections, is a tremendous growth in the demand for genomic analysis that's being performed on these biological samples. We believe that extending our sample management offering to include genomic analysis will be a meaningful value proposition to our customers as we provide services to streamline their research costs, shorten their time to answers, and provide a means to preserve sample remnants that now have significantly more value because they've been measured and analyzed, hence our acquisition of GENEWIZ.
As we have limited time on this call, I will use a couple of slides to give you an introduction to GENEWIZ, a company that may not be familiar to you, but I assure you they are a well-known, high-quality services provider to more than 4,000 customers worldwide, including most of the top pharma and biopharma companies that you can list. Founded in 1999 in New York by two PhD entrepreneurs, Dr. Steve Sun and Dr. Amy Liao, GENEWIZ originated as an efficient laboratory performing Sanger sequencing, a technology that's very precise and efficient for read sequences of DNA, typically from a few hundred up to a thousand base pairs.
Although Sanger sequencing is still a significant part of the GENEWIZ business and a capability that's still broadly utilized across the research universe, GENEWIZ capitalized on the growth and transformation afforded by the breakthrough innovation in gene sequencing and built two additional strong business lines that include next-generation sequencing and gene synthesis. Recently, NGS became the largest segment of the business due to the greater than 30% growth they experienced last year, but all three businesses are healthy and growing. GENEWIZ has approximately 1,100 employees operating in 14 sites around the globe, including the headquarters in South Plainfield, New Jersey, from where we're hosting this call. GENEWIZ has significant operations in China, predominantly in Suzhou. GENEWIZ's technical capabilities are indeed exceptional. Their customer relationships run long and deep, and their commitment to quality results and rapid customer service are known throughout the industry.
As we got to know each other, we both saw the opportunities to bring more value to customers and to benefit from synergies provided by the other. Our alignment around the customer and our complementary global footprints, GENEWIZ's strength in China and ours in Europe, were additional compelling reasons to consider the combination. As you might imagine, in a company like GENEWIZ, the employee base is highly technical, with more than 250 advanced degree experts. And they put this talent into a very efficient business construct to grow at a torrid pace. Last 12 months revenue was approximately $120 million, and that's up from $91 million in the equivalent period one year ago, or more than 30% year-over-year growth. The addition of GENEWIZ's capability puts us squarely in the middle of an additional $2 billion of available market opportunity, so we have much more room to grow.
We'll have more opportunities in the future to tell you about GENEWIZ, but suffice it to say that when defining GENEWIZ, it's hard to be any more descriptive or concise than to use their tagline, "Solid science, superior service." Hopefully, you can begin to understand why we're enthusiastic about the addition of GENEWIZ to Brooks, as we have the potential to bring tremendous value to an extended cold chain that more closely binds the sample-to-answer value creation opportunity to deliver more high growth and more profitability from our unique life sciences offerings. I'll now turn the call over to Lyndon, who will give you more specifics about the deal and an outline of next steps.
Thank you, Steve. I'll move along to slide five, which highlights the rationale of why GENEWIZ is a business we're excited to bring into the Brooks as we expand our life sciences business. Our strategy has been really clear for the past five years. We seek out the opportunities which position us to advance the life sciences expansion in our business, lead in the markets we compete, and expand our margins, and we deploy our capital in a balanced and disciplined manner. In this case, we're progressing on all elements of the strategy, and we are adding an innovative capability to a leading-edge area of research. GENEWIZ has been a trailblazer in establishing sequencing capability, developing a unique delivery model, and in penetrating the global markets.
There is no doubt that this sample-based research presents opportunity to bring incremental value to our sample-based services we already offer to more than 1,000 customers. As you can see, we are looking forward to $140 million of revenue over the next year and expect to see 50% gross margin, an accretion to our bottom line non-GAAP earnings immediately. In net, we are obtaining a robust business model operating in the infancy of the market opportunity. Turning to slide six, we provide a few of the key steps we are taking to make this deal occur. As mentioned, we've agreed on a $450 million price, or approximately 3.2 times the expected revenue for fiscal 2019. We do have the customary conditions to close, including the HSR approval, but we believe this will close well inside the December quarter.
Regarding the financing, it is worth a few comments so there's no confusion on this. One month ago, we announced the agreement to sell our Semiconductor Cryogenics business with expected closure in the March quarter. We've been pursuing each deal for a long time with a full understanding that as deals go, timing for closure is not defined. We've prepared the financing for this acquisition independent from the pending divestiture. After exercising multiple options for financing, we've concluded to increase our senior secured term loan by $350 million, which provides us the flexibility to pay it down as the pending proceeds materialize. Following the closure of the semi-cryogenics sale, we intend to manage to our target leverage ratio of three times EBITDA or lower. We anticipate this is achieved well within the 2019 timeframe.
Importantly, I highlight that the path we are on today, which includes this acquisition and the pending divestiture, still provides us the flexibility to do future acquisitions up to the similar size again. Let's move on to slide seven. Our portfolio is getting stronger, element by element. On the right, you see the semiconductor revenue for continuing operations, excluding the cryogenics business. On the left, we show the progression of our current life sciences sample management business, which is expected to deliver its 13th consecutive quarter of revenue expansion in this quarter. In the center, I reflect the revenue ramp which GENEWIZ has provided over the same time period. Total of the life sciences business would represent more than 40% of the 2018 revenue on this pro forma basis, which points to the meaningful transformation of the company as we've moved our portfolio toward higher growth.
You can see the significance of this transformation on the next slide eight. We've been using this slide format to show the changes in our business growth capability for some time now. When we removed the cryogenics and other discontinued business streams, which came out across the years, you can see the growth traction of the businesses is significant with 80% now in higher growth areas. While the semiconductor content's particularly strong, we now have one half of our high growth revenue in life sciences, buffering us further from the impact of the cycles of which semi may still hold. I included slide nine to reinforce the consistency of our strategy. It's been in place for five years and has served us well. We will continue to pursue this. Leadership in our markets, expansion of life sciences, margin expansion, and disciplined capital deployment.
Let's go on to slide 10. It's another familiar page highlighting the continued progression of our acquisition investments. As I explained earlier, we will use the financing to complete this acquisition, then expect the pending divestiture to bring back proceeds in the March quarter. The two deals are not dependent on each other, but at the same time, I believe you see the logic and compelling impact that they both have on our portfolio. Once we complete the divestiture, we will continue to have flexibility in our steps forward on this journey. To wrap up quickly on slide 11, we are really pleased with the step of bringing GENEWIZ into the Brooks fold. It is our largest step to date in the life sciences space. It puts us in the center of the exciting space of gene sequencing, adding an additional platform for growth.
It does not change our strategy but accelerates our transformation in the direction we've been heading for a long time. We expect to close this inside the December quarter and to see the results quickly become accretive. We will update you on those expectations more specifically in our year-end earnings call. This concludes our prepared remarks, and I want to express we really appreciate everyone joining on short notice. We put the press release out this morning. With that, I'm going to turn the call back over to Beatrice, the operator, and we're going to take some of the questions from the lines and let you get on with your day.
Thank you. Ladies and gentlemen, if you'd like to register a question, please press the one followed by the four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. If you are using a speakerphone, please lift your handset before entering your request. One moment please for the first question. Our first question comes from the line of Paul Knight with Janney Montgomery Scott. Please proceed with your question.
Hey, guys. It's actually Mike on for Paul. Congrats on the acquisition, and thank you for taking my question. First question I have is, how will the cross-selling of products look like with the addition of GENEWIZ? Will you see an acceleration in FluidX consumables as you transition some of those customers from GENEWIZ over to FluidX?
Hi, Mike. Thanks for joining, and thanks for the question. Really simply, we think there are synergies to be had. I think very specifically you hit one, the opportunities for the consumables we have both from FluidX and from 4titude. We think those are opportunities. Those are things that we'll model in over the next 6 months as we get closer together as two companies, that's a significant opportunity. The other one relates to the ability to couple the sample management and the genomic sequencing. We have some experience there, and we've derived significant benefits so far from some of the work we've done with RUCDR, and we think those benefits will be more significant here with GENEWIZ. It'll take some time to flesh out, those are indeed two of the things that we think will provide good synergies for us going forward.
Thanks. Then one more. I guess on the competition for GENEWIZ, who are the major competitors of GENEWIZ, or are they mainly competing against pharma and research labs doing sequencing in-house? Thanks.
The pharma customers who are doing sequencing in-house are also customers of GENEWIZ. I think I wouldn't call that competition. I would think that supplements the needs that they have, and I think GENEWIZ has done a tremendous job as every large pharma company, a very significant list of academic institutions that do have some of their own capability give business to GENEWIZ. That's something that will continue, and we actually see more opportunities coming from those entities. That part is a real plus. In each of the segments of the business, we have different competitors. I have to say, one of the things that really pleased us as we spent the last month together in diligence is GENEWIZ punches way above their weight. There are large competitors in every one of the segments, and these are known to everybody.
We think from a Sanger standpoint, far and away the market leader. The NGS competitors are known, GENEWIZ's growth is probably higher than anyone's in NGS. From a synthesis standpoint, this is also a rapidly growing business and again, different competitors in each segment. GENEWIZ is uniquely positioned to provide all of these services, and what they note is that the combination of those capabilities together allows them to capture more customers because they can provide a very unique portfolio compared to some of the competitors that compete maybe in only one or two of those segments.
Great. Thank you.
Thanks, Mike.
Ladies and gentlemen, as a reminder to register for a question, please press one, four. Our next question comes from the line of Amanda Scarnati with Citi. Please proceed with your question.
Hi. Thanks for taking the question. Just first on the key driver of this acquisition, was it driven by customers requesting more capabilities from Brooks, in terms of your sample management business and adding in this genomics business? Or was this more internal, Brooks looking to just kind of expand into different markets?
Amanda, this is one that's been on our roadmap for quite some time. We have some capabilities already built into the roadmap. We've been looking for stronger capability, and in GENEWIZ, we found exactly the kind of capability that we think customers will value even more so with the ability to manage their samples and their collections and make those part of the offering from GENEWIZ. This has been on our roadmap for quite some time. We've been talking to GENEWIZ actually for a long period of time, and I think both of us concluded that the synergy opportunities are significant, and it is a unique offering for customers to be able to provide them genomic analysis and to manage the sample.
It's been a strategic target of ours for quite some time, and we're really pleased that we are able to join with the best company in the business. We think it'll provide a tremendous value offering for customers.
Great. Then just a follow-up question on the new debt that was added. It looks like if you're using $100 million in cash already, there's additional $94-ish million in debt on the balance sheet. Are you holding onto that additional debt just for potential future acquisitions going forward, continuing on? Then do you expect to pay down that $350 million rather quickly with the sale of the Cryo business? Or again, do you expect to kind of hold onto that cash to continue to fund future acquisitions?
Yeah. Amanda, thanks for that. Let me just bridge it for you. At the end of last quarter, we were approaching right at $230 million, $240 million of cash on the balance sheet, right? We were in that balance. We add $350. It gave us $590. We're going to make use of $450. That leaves us about $140 on the balance sheet, presuming the absence of other changes in cash, such as our cash generation for the quarter. We think we'll build a little more. We still have the access to the revolver. As I mentioned, we're very cognizant of the leverage ratios.
We want the flexibility during this time as we take on a new business of size and need access to cash to ensure things stay on the tracks and potential investments that we may have. As we bring in the divestiture, and the timing of that is still uncertain, we expect it in the March quarter, then we will manage to those leverage ratios and probably lower, but absolutely down below the target level, and it's going to give us tremendous flexibility going forward. There's no agenda in terms of the immediate cash balance that you would net and net see on the balance sheet. I don't think it's excessive, given we're still in the semi space. It gives us the flexibility to handle potential downturns there as well as investments, and you can tell we're in that mode, so
Great. Then the last question I have is just on sort of the operating margin portfolio profile of the GENEWIZ business. I think you said it's about 50% gross margin. How does this impact the operating margins in the life sciences business going forward? What's your best estimate at this point, I guess?
Yeah. It's going to improve the operating margins on the life sciences side, you can tell with the significantly higher gross margins. I'm going to stay away from the bottom lines and the total expense structure, you can read into this a stronger margin profile. As we take on the business, I remind you and others on the call, we have signed the deal. We anticipate the closure inside the December quarter. As we get to the earnings call, which is typically the first week of November, we may or may not have the business in hand at that time. As we do, we'll give more description certainly then, we like to get experience with the business before we give too much where that roadmap's going to take us on those financials.
I can say emphatically it improves the margin profile of the life sciences business.
Great. Thank you so much.
Amanda, thank you. We really appreciate your time.
Mr. Robertson, there are no further questions at this time. I will now turn the call back to you. Please continue with your presentation or closing remarks.
Beatrice, thank you very much. Everyone for joining the call and your attention to us always. Our team couldn't be more proud of being able to welcome the GENEWIZ team into the Brooks company. We're anxious to get that closure happening and that final step. Just to highlight, as Steve alluded, we're in New Jersey today. We're at the headquarters of GENEWIZ, and we look forward to meeting with the employees here, the team. We look forward to meeting with the investor community as well as we move forward and to address more questions. Thank you for your time. We'll look forward to talking to you at our earnings call in November. Thank you.
Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.