February 1, 2016
By Alex Keown, BioSpace.com Breaking News Staff
ABBOTT PARK, Ill. – Waltham, Mass.-based Alere Inc. ’s is up more than 45 percent following news of its acquisition by Chicago-based Abbott Laboratories this morning.
Alere’s stock is trading at $54.01 per share. Up $16.81 in pre-market sales. Abbott announced this morning it was acquiring Alere Inc. for $5.8 billion in an effort to boost its global diagnostics position.
Abbott said the acquisition will allow the company to “provide new, flexible, cost-effective, high-quality products to help health systems meet growing demand in both in-patient and out-patient settings.” The company said Alere’s portfolio of products will provide the company entry into new outlets, including doctors’ offices, clinics, pharmacies and at-home testing.
Abbott said its combination with Alere will offer the broadest point of care menu of infectious disease, molecular, cardiometabolic and toxicology testing, expanding Abbott‘s platforms to include benchtop and rapid strip tests.
“Our leading platforms and global presence in point-of-care diagnostics, combined with Abbott‘s broad portfolio of market-leading products, will accelerate our shared goal of improving patient care,” Namal Nawana, president and chief executive officer of Alere said in a statement.
Alere had global sales of $2.5 billion last year, with half of that being in the United States. Alere also has a growing presence in key international markets, where Abbott‘s capabilities and infrastructure will drive accelerated growth of Alere‘s portfolio, Abbott said.
Under the terms of the agreement, Alere shareholders will receive $56 per common share in cash at the completion of the transaction, and Alere will become a subsidiary of Abbott. Alere‘s net debt, currently $2.6 billion, will be assumed or refinanced by Abbott.
“The combination of Alere and Abbott will create the world’s premier point of care testing business and significantly strengthen and grow Abbott‘s diagnostics presence,” Miles White, chairman and chief executive officer of Abbott said in a statement.
In 2015, White said he was interested in pursuing a deal in the medical device arena. In his 13 years helming Abbott, White has been behind several big deals, including the 2006 acquisition of Guidant‘s coronary stent business for $4.5 billion and the $6.9 billion purchase of Knoll Pharmaceuticals in 2001. In August, Abbott opted not to pursue a deal to acquire St. Jude Medical Inc. for $25 billion.
News of the acquisition of Alere comes on the heels of Abbott’s closure of its RedWood City, Calif. vascular device manufacturing facility, which cost 144 jobs.
Since the 2012 spinoff of AbbVie, Abbott has focused on increasing its generic-drug offerings in emerging markets, most particularly China, as well as adding new technology to the company’s device and diagnostics businesses. Abbott management approved plans to realign its vascular manufacturing operations and core diagnostics business in order to reduce costs, the company said in its latest quarterly report. Abbott’s stock is slightly up this morning, trading at $41.55 per share.
