Hologic, Inc. and Gen-Probe Inc. today announced that Hologic will acquire all of the outstanding shares of Gen-Probe for $82.75 per share in cash, or a total enterprise value of approximately $3.7 billion. The all-cash transaction is expected to be funded through available cash and additional financing of term loans and high-yield securities. The transaction is expected to be completed in the second half of calendar 2012.
The deal is expected to be $0.20 accretive to Hologic's adjusted earnings per share in the first fiscal year after close and significantly more accretive thereafter. Hologic also expects the transaction to "accelerate top- and bottom-line growth rates." The combined company expects to realize approximately $75 million in cost synergies within three years following the close of the transaction. In addition, the combined company expects to have strong free cash flows, which will be used primarily to reduce debt with the expectation to return to pre-transaction leverage levels within three years.
Gen-Probe is a well-known name in molecular diagnostics products and services, making it a highly complementary addition to Hologic's growing diagnostics portfolio. The combined company will have pro forma LTM revenues of approximately $2.4 billion, adjusted EBITDA of $822 million (excluding synergies) and offer a wide spectrum of health products globally. The transaction allows Hologic to combine Gen-Probe's TIGRIS and PANTHER automation platforms and extensive menu of sexually transmitted disease tests---including the APTIMA line of chlamydia/gonorrhea, HPV, and Trichomonas products---with its strong global market presence and distribution, all targeting women's health. In addition, Gen-Probe's PROCLEIX line of HIV, HCV, HBV, and West Nile Virus blood-screening products and strong partnership with Novartis provide an attractive market, with a global reach and significant growth opportunities for the combined company, Hologic stated. The combined company expects to create additional value through cross-selling opportunities, utilizing the combined global sales force and complementary R&D and operational capabilities.
Rob Cascella, President and CEO of Hologic, said, "Through this compelling transaction, we will achieve critical mass in our core diagnostics business and meet the needs of our customers with a broader portfolio of diagnostics technology, automation and connectivity solutions. With the combination of our capabilities, Hologic will operate a diagnostics franchise with the growth potential similar to our breast-health franchise."
Carl Hull, Chairman and CEO of Gen-Probe, said, "This transaction provides compelling cash value for our shareholders and represents an outstanding opportunity for our business. Together, Gen-Probe and Hologic will be very well-positioned to pursue a complete range of diagnostic opportunities in women's health, with a stronger focus on the dynamic molecular diagnostics market. Specifically, we are excited about the opportunity to increase demand for our APTIMA women's health products based on Hologic's global commercial presence."
Following the close of the transaction, Gen-Probe will become a wholly-owned subsidiary of Hologic. Hologic will retain its headquarters in Bedford, Massachusetts, and the combined company will maintain a significant presence in San Diego, California.
Rob Cascella will continue as President and CEO of Hologic and Carl Hull, Chairman and CEO of Gen-Probe, will oversee the company's combined diagnostics business.