Abbott Laboratories agreed to buy Alere Inc. for $56 a share, or about $5.8 billion, to become the leader in the market for rapid medical tests and adding another deal to a long list in the fast-consolidating medical devices and technology space.
The agreement will boost Abbott’s diagnostics sales to about $7 billion, Chief Executive Officer Miles White told investors on Monday, and add tests for heart attacks, influenza and drug abuse to Abbott’s suite of products for testing genetic mutations that can assess patients’ reactions to pharmaceuticals or can help guide cancer therapy.
“The demand for point-of-care testing is accelerating as health care providers and consumers look for better ways to get fast, accurate and actionable information to guide decision making that improves patient care and reduces unnecessary health care” spending, White said on a conference call.
White said that the Alere deal won’t restrict his interest in acquisitions in other areas. While the company has about $6.1 billion in cash and short-term assets, thanks in part to its equity stake in Mylan NV, Abbott will finance the Alere deal with debt, White said.
“We’ve got plenty of capacity and plenty of opportunity,” White said on the call. “This is a pretty fundamental and key acquisition we’re talking about today for our diagnostic business, but it’s not the only thing on my radar screen and it’s not the only thing in the center of my radar screen.”
Evercore Partners Inc. served as Abbott’s financial adviser, and Kirkland & Ellis as legal adviser. Alere, based in Waltham, Massachusetts, was advised by JPMorgan Chase & Co., and by the law firm Cravath, Swaine & Moore.