Medtech M&A madness: Abbott to pay nearly $6B for Alere

Abbott (NYSE:ABT) said today that it agreed to put nearly $6 billion on the table for diagnostics giant Alere (NYSE:ALR), saying it aims to become the leading point-of-care testing provider with annual sales of more than $7 billion.

Abbott Park, Ill.-based Abbott said it agreed to pay $56 per share for Waltham, Mass.-based Alere, marking a roughly 51% premium over the $37.20 Jan. 29 closing price for ALR shares. The stock was trading at $54.65 apiece in pre-market trading today, up 46.9%, before subsiding to $53.80 per share in early trading this morning. ABT shares were down -1.8% to $37.16 apiece in early activity.

“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,” Abbott chairman & CEO Miles White said in prepared remarks. “We want to offer our customers the best and broadest diagnostics solutions. Alere helps us do that.”

“Today’s announcement marks an exciting and transformative milestone for Alere and one that provides an immediate benefit for our stockholders,” added Alere president & CEO Namal Nawana. “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.”

Abbott said the deal for the former Inverness Medical business will immediately add to earnings, with boosts of 12¢ to 13¢ in 2017 and more than 20¢ in 2018. The agreement calls for Abbott to take on some $2.6 million in Alere debt.

Evercore advised Abbott on the buyout, with Kirkland & Ellis providing legal counsel. JP Morgan advised Alere, with Cravath, Swaine & Moore as legal counsel.

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