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Abbott antes up $5.8B in Alere deal
ABBOTT PARK, Ill. & WALTHAM, Mass.—Abbott and Alere Inc., a leader in point-of-care diagnostics, have announced a definitive agreement under which Abbott will acquire Alere. Per the terms of the agreement, Abbott will pay $56 per common share, for a total expected equity value of $5.8 billion. Once the transaction is completed, Abbott will become the leading diagnostics provider of point-of-care testing, with expected total diagnostics sales to exceed $7 billion after the close.
The transaction will be immediately accretive to Abbott's ongoing earnings per share upon close and significantly accretive thereafter, with approximately 12 to 13 cents of accretion in 2017 and more than 20 cents in 2018. The combination is anticipated to result in annual pre-tax synergies approaching $500 million by 2019 and increasing thereafter, including both sales and operational benefits. The agreement stipulates that 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, which currently stands at $2.6 billion, will be assumed or refinanced by Abbott.
"Today's announcement marks an exciting and transformative milestone for Alere and one that provides an immediate benefit for our stockholders," Namal Nawana, president and CEO of Alere, said in a press release. "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. I'd like to thank our global workforce of nearly 10,000 employees whose hard work and dedication has enabled Alere to contribute to improved patient outcomes throughout the world."
The combined business 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. More than half of Alere's $2.5 billion in sales are in the United States. The company also has a growing presence in key international markets, where Abbott's capabilities and infrastructure will drive accelerated growth of Alere's portfolio.
Alere is headquartered in Waltham, Mass., and delivered more than 1.4 billion tests last year, with offerings in fields such as infectious disease, molecular, cardiometabolic and toxicology. In addition to tests for infections such as HIV, tuberculosis, malaria and dengue, Alere develops simple, rapid tests, including Alere i, the first molecular CLIA-waived test for flu and strep, which delivers results in under 15 minutes.
"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," commented Miles D. White, chairman and CEO of Abbott, in a statement. "We want to offer our customers the best and broadest diagnostics solutions. Alere helps us do that."
Both companies' boards of directors have approved the transaction, but it is still subject to the approval of Alere shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals.
Evercore is acting as financial advisor and Kirkland & Ellis LLP is serving as legal counsel to Abbott for this transaction. JP Morgan is acting as financial advisor and Cravath, Swaine & Moore is serving as legal counsel to Alere.
SOURCE: Abbott press release