Massachusetts-based women’s health devices maker Hologic (NSDQ:HOLX) may shutter a Madison, Wisc. manufacturing facility, according to an internal memo obtained by the Milwaukee-Wisconsin Journal Sentinel.
The closure will "likely" take place within 18 months of closure of Hologic’s $3.7 billion Gen-Probe acquisition, according to a memo dated June 13.
The Madison plant houses molecular diagnostics maker Third Wave Technologies, which Hologic acquired for $580 million in 2008 and which has been a bit of a drag ever since.
In the 2nd quarter of 2009 Hologic took a jaw-dropping $2.3 billion write off to its goodwill and intangible assets related to that merger. The device maker reported another $48 million charge for amortization of intangibles related to the merger during Q3 2009.
In January 2010 Hologic inked a $87,400 settlement with the U.S. Environmental Protection Agency over alleged hazardous waste violations at the Madison facility.
The facility employs about 150, according to a local directory. Hologic will finalize its cost-cutting measures over the next 2 months and will implement them over a period of 18 to 24 months after the Gen-Probe deal closes, according to the paper.
It’s not yet clear whether all of the plant’s workers will get pink slips, but Hologic CEO Rob Cascella promised to provide severance, according to the memo.
Hologic representatives did not return requests for comment.
The women’s health giant announced in April that it agreed to an $82.75-per-share bid for Gen-Probe, a 20% premium over GPRO’s closing price Friday, April 27.
The news sent shares of Gen-Probe and Conceptus shares up sharply, but slashed nearly than 10% from HOLX stock. Gen-Probe shares were up 18.7% to $81.55 as of market close on Monday, April 30, and Hologic shares were down 9.9% to $19.12.
The deal to acquire Gen-Probe is expected to add 20¢ to Hologic’s adjusted EPS in the 1st year following the deal’s completion. The deal will also drive about $75 million in cost savings as the companies integrate in the 3 years after the merger.
HOLX shares were flat at $18.56 as of about 2:15 p.m. today.