Hologic (NSDQ:HOLX) agreed to pay about $3.7 billion for molecular diagnostics maker Gen-Probe (NSDQ:GPRO) in a cash-and-debt deal expected to close during the 2nd half of the year.
Hologic said it expects the deal to add 20¢ to its adjusted earnings per share in the first year following the deal’s completion. The deal will drive about $75 million in cost savings as the companies integrate in the 3 years after the merger.
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"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 3 years," according to a press release.
"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 president & CEO Rob Cascella said in prepared remarks. "This transaction establishes Hologic as a premier company in STD diagnostics and advances our core focus on women’s health. 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."
Cascella will stay in the corner office, with Gen-Probe chairman & CEO Carl Hull running Hologic’s newly bolstered diagnostics business. Hologic will keep its headquarters in Bedford, Mass., maintaining "a significant presence" in San Diego, Gen-Probe’s home.
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