Hologic, a developer of diagnostics products, medical imaging systems and surgical products, has signed a definitive agreement to acquire all outstanding shares of Gen-Probe for $82.75 per share in cash, or a total enterprise value of around $3.7bn.
The all-cash transaction is anticipated to be funded through available cash and additional financing of term loans and high yield securities.
The acquisition expects to realise approximately $75m in cost synergies within three years following the close of the transaction, and it is also supposed 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 three years.
Rob Cascella, Hologic president and chief executive officer, said Gen-Probe is an ideal partner and strategic fit to the company's existing diagnostics business and complements its focus on scaling and diversifying diagnostics franchise.
"Gen-Probe is a unique player in molecular diagnostics, with best-in-class technology, including the differentiating automation capabilities of Tigris and Panther, a broad menu of tests, such as the recently approved APTIMA HPV and Trichomonas assays, and a leading blood screening business," Cascella added.
"This transaction establishes Hologic as a premier company in STD diagnostics and advances our core focus on women's health."
Carl Hull, Gen-Probe chairman and chief executive officer, said the transaction provides cash value for the company's shareholders and represents an outstanding opportunity for its business.
"Together, Gen-Probe and Hologic will be very well-positioned to pursue a complete range of diagnostic opportunities in women's health, with a stronger focus on the dynamic molecular diagnostics market," Hull added.
Following the closure of transaction, Gen-Probe will become a wholly-owned subsidiary of Hologic, while Hologic will retain its headquarters in Bedford, US. The combined company will maintain a significant presence in San Diego, California, US.
The deal is expected to close in the second half of this year, subject to the satisfaction of customary closing conditions, including approval of Gen-Probe's shareholders and expiration of the applicable waiting periods.