Middle-market dealflow in the laboratory/pharmaceutical industry is expected to increase as companies look to beef up in an uncertain atmosphere when it comes to healthcare reform in the U.S. On Tuesday, Baxter International Inc. (NYSE:BAX) and Laboratory Corp. of America Holdings (NYSE:LH) each pulled off a midmarket deal that expands its market share. The deals took place as market uncertainty was reflected in the Dow closing down 16.10, or .19%, to $8322.91 while the Nasdaq finished down 1.27, or .07%, to 1,764.92.
Shares of Baxter International finished down 2 cents, or .04%, to $50.45 as it announced plans to acquire the continuous renal replacement therapy business of Edwards Lifesciences Corp. for up to $65 million. The deal still requires regulatory approval, but the counterparts expect completion in the third quarter. Baxter does not expect it to affect its 2009 earnings.
Meanwhile, Laboratory Corp. fell 26 cents, or .40%, to $65.45 as it acquired South San Francisco, Calif., molecular diagnostic products maker Monogram Biosciences Inc. for $4.55 a share, or $106.7 million. "LabCorp management intends to leverage the company's national infrastructure to capitalize on Monogram's existing sales force. ... It should augment the company's efforts to grow its specialty testing business," Jefferies & Co. analyst Arthur Henderson wrote in a Tuesday report.
Additionally, Office Depot Inc. (NYSE:ODP) closed up 10 cents, or 2.64%, to $3.89 as it received a $350 million investment from U.K.-based private equity company BC Partners Ltd., which it could convert to slightly more than 20%. (The Deal Pipeline subscribers see the full story.) The deal is the first U.S. transaction for BC Partners and first time taking a minority stake in a U.S.-listed public company since it opened a U.S. office in 2007. - Gerald Magpily
