Alere agreed to sell Alere Health, its health-management unit, to health-services provider Optum for $600 million in cash in order to focus on its core rapid diagnostics business.
Alere said it plans to use proceeds from the sale to reduce its debt load. The deal is subject to approval by certain lenders under Alere’s senior secured credit facility. Optum is a unit of UnitedHealth Group.
"Combining Alere Health and Optum allows our clients to continue to receive the leading health management solutions they need today and receive even greater value in the future. It allows Alere to focus on its strengths as the global leader in rapid diagnostics, where we have leading assets and operate in growing markets," Alere CEO Namal Nawana said in a statement.
Nawana, who has been serving as Alere’s interim CEO and president, was formally named to the posts today. He succeeds Alere founder Ron Zwanziger, who resigned in July. Nawana, who will also serve on Alere’s board, joined the company in December 2012 as COO.
One of Alere’s major shareholders, Zwanziger caused a stir with investors in September when he unveiled plans to take Alere private in a transaction valued around $3.82 billion.
The announcement of the Optum deal came as Alere reported soaring 3rd-quarter losses for the 3 months ended Sept. 30.
Alere posted a loss of $91.5 million, or $1.10 a share, a whopping 269.0% increase over the same quarter in 2013. Revenue dipped 2.3% to $736 million.
Excluding 1-time items, adjusted earnings from continuing operations were 48¢ a share, a 21.3% decline from Q3 2013.
Net revenue for the quarter from the company’s core professional diagnostics unit was flat at $586 million, down 0.8% from last year. Health-information solutions net revenue dropped to $124 million, a 7.5% decline.
ALR shares closed up 4.1% at $39.12 apiece.