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 Hologic to acquire Gen-Probe for $3.7 billion
04-30-2012
SHARING OPTIONS:
BEDFORD, Mass., and SAN DIEGO—Hologic Inc. and
Gen-Probe Inc. have announced that their boards of directors have unanimously
approved a definitive agreement under which Hologic will acquire all of the
outstanding shares of Gen-Probe for $82.75 per share in cash, or a total
enterprise value of approximately $3.7 billion.
The all-cash transaction is expected to be funded
through available cash and additional financing of term loans and high-yield
securities, with an expected completion of the deal in the second half of 2012.
Cowen and Co analyst Doug Schenkel offers the
opinion that the $3.7 billion price tag seems to be a full and fair valuation
and he expects that a competitive bid is unlikely. The deal may create ripples
in other ways, though, as noted by Oppenheimer & Co analyst David Ferreiro in
an investor note when he indicated the acquisition of Gen-Probe will probably attract
investors' attention to the remaining independent companies with molecular
diagnostic platforms, including QIAGEN and Cepheid.
Hologic notes that Gen-Probe “is a leader in
molecular diagnostics products and services, making it a highly complementary
addition to Hologic's growing diagnostics portfolio,” and the combined company
would have pro-forma revenues over
the past 12 months of approximately $2.4 billion, adjusted earnings before
interest, taxes, depreciation, and amortization of $822 million (excluding cost
synergies, which are predicted to be approximately $75 million in within three
years following the close of the transaction) and offer a wide spectrum of
health products globally.
“Gen-Probe is an ideal partner and strategic fit
to Hologic's existing diagnostics business and complements our focus on scaling
and diversifying our diagnostics franchise,” said Rob Cascella, president and CEO
of Hologic. “Gen-Probe is a unique player in molecular diagnostics, with
best-in-class technology, including the differentiating automation capabilities
of TIGRIS and PANTHER, a broad menu of tests, such as the recently approved
APTIMA HPV and Trichomonas assays, and a leading blood screening business. This
transaction establishes Hologic as a premier company in sexually transmitted
disease diagnostics and advances our core focus on women's health. With unique
capabilities and an impressive new product pipeline, our combined company will
be well positioned globally to capitalize on the fast-growing molecular
diagnostics market with an established global infrastructure.”
In addition, Gen-Probe's PROCLEIX line of HIV,
HCV, HBV and West Nile Virus blood screening products, as well as its strong
partnership with Novartis were attractive to Hologic and provide “a global
reach and significant growth opportunities for the combined company.”
The combined company also expects to create
additional value through significant cross-selling opportunities, a combined
global sales force and complementary research and development and operational
capabilities.
“Through this compelling transaction, we will
achieve critical mass in our core diagnostics business and meet the needs of
our customers with a broader portfolio of diagnostics technology, automation
and connectivity solutions,” Cascella said. “With the combination of our
capabilities, Hologic will operate a diagnostics franchise with the growth
potential similar to our breast health franchise.”
“Together, Gen-Probe and Hologic will be very
well-positioned to pursue a complete range of diagnostic opportunities in
women's health, with a stronger focus on the dynamic molecular diagnostics
market,” added Carl Hull, chairman and CEO of Gen-Probe. “Specifically, we are
excited about the opportunity to increase demand for our APTIMA women's health
products based on Hologic's global commercial presence.”
Hologic expects the inclusion of Gen-Probe into
the company will be $0.20 accretive to Hologic's adjusted earnings per share in
the first fiscal year after close and “significantly more accretive”
thereafter. Hologic also expects the transaction to accelerate top and bottom
line growth rates and says the combined company expects to have strong free
cash flows, which will be used primarily to reduce debt, “with the expectation
to return to pre-transaction leverage levels within three years.”
Following the close of the transaction, Gen-Probe
will become a wholly-owned subsidiary of Hologic. Hologic will retain its
headquarters in Bedford, Mass., and the combined company will maintain a
significant presence in San Diego. Cascella will continue as president and CEO
of Hologic and Hull will oversee the company's combined diagnostics business.
Code: E04301201 Back |
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