Abbott Labs to Acquire Alere
February 01 2016 - 09:30AM
Dow Jones News
Abbott Laboratories agreed to acquire diagnostic-test company
Alere Inc. for roughly $4.8 billion, a deal Abbott expects will
make it a leading provider of point-of-care testing.
The company's news release Monday placed the equity value of the
deal at $5.8 billion. An Abbott Laboratories spokeswoman said the
deal includes the impacts of restricted stock units, options and
preferred shares.
Alere shares soared 46% to $54.40 in recent premarket trading to
reflect the deal price of $56 a share, a 51% premium to Friday's
close. Abbott also said Alere's net debt, currently about $2.6
billion, would be assumed or refinanced by Abbott.
The deal comes days after Abbott reported its profit fell 15% in
the final quarter of the year, as the stronger dollar weighed on
its results in emerging markets. The company also issued annual
guidance sharply below Wall Street expectations. On the company's
conference call, Abbott Chief Executive Miles White sounded
pessimistic about making near-term acquisitions, particularly in
emerging markets.
In its news release Monday, Abbott said more than half of
Alere's $2.5 billion in annual sales are in the U.S.
Abbott said the deal also will expand its platforms to include
benchtop and rapid strip tests. The company expects the transaction
will boost its per-share earnings immediately upon closing, raise
its per-share profit by 12 cents to 13 cents next year and provide
a boost of more than 20 cents a share in 2018.
The combined company is expected to see pretax savings of $500
million a year by 2019, with more sales and operational benefits
afterward
Last month, Alere said fourth-quarter revenue would miss
estimates as it faces foreign-exchange headwinds and a quiet North
American flu season.
The companies plan to provide more details regarding the deal
during a conference call at 9 a.m. EST.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
February 01, 2016 09:15 ET (14:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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