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Abbott to Acquire Alere, a Maker of Medical Tests
 
 
  By LESLIE PICKERFEB. 1, 2016
 
http://www.natap.org/2013/newsUpdates/081413_01.htm
 
http://www.alere.com/en/home/product-details/immunocomb-hcv.html
 
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http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0058468
 
http://www.iapac.org/tasp_prep/presentations/TPSlon13_Panel6_Baker.pdf
 
http://www.nytimes.com/2016/02/02/business/dealbook/abbott-to-acquire-alere-a-maker-of-medical-tests.html?_r=0
 
Abbott said on Monday that it had agreed to acquire Alere for an expected value of $5.8 billion to enhance its diagnostics business.
 
Alere, which had a market value of $3.2 billion as of Friday, makes "point of care" medical tests that can provide results in a matter of minutes. The Waltham, Mass.-based company will become a subsidiary of Abbott, which is expecting to have total diagnostic sales of $7 billion after the transaction closes, according to a statement released by the companies on Monday.
 
"We want to offer our customers the best and broadest diagnostics solutions," Miles D. White, chairman and chief executive of Abbott, said in the statement. "Alere helps us do that."
 
Alere, which was founded in 2001, said it delivered more than 1.4 billion tests last year, producing annual sales of $2.5 billion - half of that from the United States. The company provides tests for H.I.V., tuberculosis, malaria, dengue, as well as the flu and strep.
 
Some analysts were concerned that the acquisition of Alere could weigh on Abbott's growth. In the 12 months through December, Alere's revenue declined 3.6 percent, according to estimates compiled by Standard & Poor's Capital IQ, while Abbott's increased 0.8 percent over that same period.
 
Abbott will pay $56 a common share of Alere, and it will assume, or refinance, $2.6 billion of Alere's net debt. Abbott also plans to finance the deal with debt, Brian J. Blaser, the executive vice president of diagnostics products at Abbott, said on the company's conference call on Monday.
 
The offer represents a premium of more than 50 percent over Alere's closing stock price on Friday, and its shares were up 45 percent in morning trading on Monday.
 
Thomas C. Freyman, Abbott's executive vice president of finance and administration, said on the call that the process for acquiring Alere was "competitive." It was the "fair premium" and the "strategic fit" that allowed Abbott to prevail, he said.
 
Other potential bidders before Monday's deal announcement may have been private equity firms or the Danaher Corporation, Mark Massaro, an analyst with Canaccord Genuity, said in a note on Monday. It's unlikely that other bidders will enter the fray at such a high premium, he said.
 
Point-of-care tests represented about 10 percent of Abbott's total diagnostic sales of $4.6 billion last year. In addition to diagnostics, Abbott also makes medical devices, nutritionals and generic pharmaceuticals.
 
The transaction will be accretive to Abbott's earnings per share when the deal closes, and is expected to add about 12 to 13 cents in 2017 and more than 20 cents per share in 2018. The combined company is expecting to extract $500 million in synergies by 2019 through sales and operational benefits.
 
Medical testing was not the only health care sector to have a deal announced Monday. The Stryker Corporation agreed to acquire Sage Products, which makes products for the intensive-care unit, from the private equity firm Madison Dearborn Partners for $2.8 billion in cash.
 
As a result of the deal, which the company said was accretive, Stryker raised its full-year 2016 adjusted earnings guidance by $0.05 per share to a range of $5.55 to $5.75 per share.
 
Evercore is providing financial advice to Abbott, while JPMorgan Chase is working with Alere. Kirkland & Ellis is providing legal counsel to Abbott, and Cravath, Swaine & Moore is serving Alere.
 
JPMorgan also served as Stryker's financial adviser, while Barclays worked with Sage. Sullivan & Cromwell provided legal advice to Stryker, and Kirkland & Ellis and Madden, Jiganti, Moore & Sinars advised Sage.

 
 
 
 
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