Abbott Laboratories to acquire point-of-care testing firm Alere

Alere CEO and President Namal Nawana said, “Our leading platforms and global presence in point-of-care diagnostics, combined with Abbott’s broad portfolio of market-leading products, will accelerate our shared goal of improving patient care”. Medtronic, the largest manufacturer of heart rhythm devices like pacemakers, agreed to acquire Bellco, a privately-held company that sells equipment for kidney dialysis. Last year, there were 1,007 pending or completed deals in the industry, worth a total of $58.9 billion, according to data compiled by Bloomberg.

Abbott Laboratories said it would buy Alere Inc for $5.8 billion to become a leader in point-of-care testing, a fast-growing market as physicians increasingly adopt rapid tests that speed up treatment.

Abbott said it will pay $56 for each share of Alere, a 50 percent premium from Friday’s closing price of $36.20.

“The combination of Alere and Abbott will create the world’s premier point of care testing business and significantly strengthen and grow Abbott’s diagnostics presence”, Abbott Chief Executive Miles White said in a statement. “We want to offer our customers the best and broadest diagnostics solutions”. BKD Wealth Advisors LLC increased its position in shares of Abbott Laboratories by 2.1% in the fourth quarter.

Based in Abbott Park, IL, the company is engaged in the discovery, development, manufacture and sale of a range of health care products. At this point, the companies have only entered into a definitive agreement; customary and regulatory conditions still apply if the transaction is to close. The company had beaten analysts’ predictions on earnings per share (EPS) but fell slightly short on revenue. Abbott also will assume about $2.6 billion of Alere debt as part of the buyout.

(+) EYEG, (+80.0%) Rodman & Renshaw begins analyst coverage with a Buy rating and a $10 price target.

Abbott said the deal will immediately add to its earnings per share by approximately 12 to 13 cents in 2017, and more than 20 cents in 2018.