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Hologic acquires Gen-Probe

by Lou Whiteman | Published April 30, 2012 at 1:29 PM

Hologic Inc. said Monday it would acquire Gen-Probe Inc. in a $3.7 billion cash transaction designed to strengthen the buyer's diagnostic capabilities.

Terms of the deal call for Bedford, Mass.-based Hologic to pay $82.75 per share in cash for Gen-Probe, a premium of 20% over the target's Friday close. Hologic, which supplies diagnostics products and medical imaging systems focused on women's health, expects the deal to contribute about 20 cents per share to its earnings in the first year after it closes, and "significantly more" in the years that follow.

San Diego-based Gen-Probe is a provider of molecular diagnostics products and services, including a line of sexually transmitted disease tests and viral blood screenings. Hologic said the combined company, which would have annual sales of about $2.4 billion and pro forma Ebitda of about $822 million, would have the heft to market and distribute Gen-Probe's products to a wider, global market.

"Gen-Probe is an ideal partner and strategic fit to Hologic's existing diagnostics business and complements our focus on scaling and diversifying our diagnostics franchise," Hologic CEO Rob Cascella said in a statement. "With unique capabilities and an impressive new product pipeline, our combined company will be well positioned globally to capitalize on the fast-growing molecular diagnostics market with an established global infrastructure."

The combination would have a presence in more that 150 countries, including more than 500 employees focused on expanding the diagnostics market in China.

Hologic has been an active acquirer in recent years, buying Interlace Medical Inc. for $125 million and TCT International Co. Ltd. for $100 million in 2011. This is the company's largest deal since its 2007 purchase of Cytyc Corp. for $6.2 billion.

Hologic said it would fund the deal through cash on hand along with term loans and high-yield financing, adding it has secured fully committed financing from Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC.

Goldman, Sachs & Co. and Perella Weinberg Partners LP are acting as financial advisers to Hologic, with Brown Rudnick LLP and Jones Day serving as legal counsel. Gen-Probe received financial advice from Morgan Stanley.

Skadden, Arps, Slate, Meagher & Flom LLP's David Eisman, Brian McCarthy, David Kitchen, Joseph Yaffe and Clifford Aronson are legal counsel, and Cooley LLP acted as legal adviser to Gen-Probe.

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