Fri, Oct. 21, 10:48 AM
- Unsurprisingly, Alere (ALR +0.7%) stockholders voted overwhelmingly in favor of a merger with Abbott (ABT -1.1%) in a special meeting. Over 98% of the votes cast (representing 77% of the company's outstanding shares) backed the $56/share transaction. Yesterday's close was $44.10.
- The companies announced the deal in January but it became a bit wobbly when a rash of problems arose at Alere including dodgy billing practices, inappropriate revenue recognition and a government inquiry into its marketing and billing practices. The firms have agreed to engage a mediator to settle their differences.
- Read now: Merger Arbitrage - Alere And Abbott
Tue, Oct. 18, 8:16 AM
- Abbott (NYSE:ABT) and St. Jude Medical (NYSE:STJ) have agreed in principle to sell certain products to Terumo (OTCPK:TRUMF)(OTCPK:TRUMY) for $1.12B in cash. The transaction, contingent on the successful completion of Abbott's $25B acquisition of St. Jude, includes St. Jude's Angio-Seal and Femoseal vascular closure products and Abbott's Vado Steerable Sheath.
- Abbott will retain its vascular closure products, including the Perclose ProGlide Suture-Mediated Closure System, StarClose SE Vascular Closure System and Prostar XL Percutaneous Vascular Surgical System.
- Abbott adds that its expects to mitigate any impact on non-GAAP earnings related to the sale of the assets.
Fri, Sep. 16, 3:48 PM
- Johnson & Johnson (JNJ -0.1%) inks an agreement with Abbott Laboratories (ABT +1.5%) to acquire its Medical Optics unit for $4.325B in cash. The business generated $1.1B in revenues last year in three business segments: cataract surgery, laser refractive surgery and consumer eye health.
- The deal, expected to close in Q1 2017, will be modestly accretive to JNJ's non-GAAP 2017 earnings.
Thu, Sep. 8, 1:07 PM
- Alere (ALR +0.2%) and cold-footed Abbott Laboratories (ABT -0.2%) have agreed to work with a mediator to settle their disagreements over Abbott's now-rocky $5.8B bid for the point-of-care diagnostics firm. According to court filings, the companies are considering former Delaware Chancellor William Chandler for the job. Alere recently filed a lawsuit in Delaware to force Abbott to follow through on its offer.
- Abbott appears to have lost enthusiasm for the deal at its current valuation, influenced, no doubt, by a rash of problems at Alere including restating financials due to inappropriate revenue recognition and a government inquiry into its billing and marketing practices.
- Alere has accused Abbott of cooling to the deal because of its $25B St. Jude Medical takeover. Abbott counters by saying the delay in closing the transaction is due to Alere's failure to file its regulatory submissions on time.
- Read now Merger Arbitrage - Alere and Abbott
Mon, Aug. 8, 10:32 AM| Mon, Aug. 8, 10:32 AM | 14 Comments
Wed, Jul. 27, 5:58 PM
- The problems continue to mount for point-of-care diagnostics firm Alere (NYSE:ALR). The latest stumble is the news that U.S. Department of Justice investigators have requested information from the company about its government billing practices, specifically its toxicology unit, which provides drug testing for employers and government bodies. The business accounts for about a quarter of Alere's revenues.
- The company received a subpoena last month seeking patient billing records. Its specific area of interest is Alere's efforts to collect co-payments from patients and alleged submission of forms to government programs like Medicare on patients' behalf. Federal law prohibits healthcare firms from covering payments for patients insured under programs like Medicare and Medicaid. The feds are also looking into whether Alere made payments or provided other inducements to doctors in order to influence their ordering of its tests. The government regards these activities as illegal kickbacks. The situation has the earmarks of a whistleblower suit.
- In February, Alere agreed to be acquired by Abbott Laboratories (NYSE:ABT) for almost $6B. Since then, however, the company has faced one embarrassing snafu after another, including having to restate its financial reports due to inappropriate revenue recognition (including "bill-and-hold" activities in China) and recalling products due to safety concerns related to the potential misreporting of results.
- In April, Abbott purportedly offered to pay as much as $50M to back out of the deal, a proposal Alere's board rejected. It is a virtual certainty that Abbott will wash its hands of Alere, though. It's just a matter of price at this point.
- Shares were down 29% today, but have rebounded 7% after hours on robust volume.
- Read now A Deal Worth A Leer
- Update: In a statement, the company says the billing records of interest, dating back to 2010, are related to its Austin, TX pain management laboratory. It is fully cooperating with the inquiry. It also says the billings in question accounted for less than 1% of its revenues and the matter is "not material."
Fri, Jul. 15, 12:25 PM
- In a statement, point-of-care diagnostics firm Alere (ALR +7.6%) confirms that will restate its annual financial statements for 2013, 2014 and 2015 and interim statements for the periods ended March 31, 2015 and September 30, 2015 after identifying the specific revenue recognition issues that have delayed the filing of its 2015 reports.
- The specific areas pertaining to the timing of revenue recognition were mainly confined to Africa, where revenue was recorded when product was shipped to the distributor but the title did not transfer until the distributor paid for the products in full or the distributor was not obligated to pay the bill until the products were sold to end users.
- Another problem was "bill and hold" transactions (an invoice is generated but the product remains in inventory), principally in China (any legitimate accounting firm will consider this a significant "no-no").
- There were other unspecified transactions where Alere recognized revenue prior to satisfying all the contractual criteria for the transfer of title and risk to the customer.
- The company says the revisions will not be material since they do not impact the total amount of recorded revenue other than the change brought about by establishing a returns allowance for its Indian subsidiary. It plans to file its 2015 financials as soon as feasible, followed by its Q1 2016 10-Q. It admits that it expects to report one or more material weaknesses in its disclosure controls and procedures and internal control over financial reporting.
- On a preliminary basis, revenue ($M) for 2015 and Q1 2016 will be $2,447 - 2477 and $573 - 593, respectively. Net income will be $10 - 25 and $(8) - 2, respectively, and non-GAAP EBITDA $505 - 520 and $106 - 116.
- Analysts expect the $5.8B takeover by Abbott Laboratories (ABT -0.4%) to proceed.
Wed, Jul. 13, 5:12 AM
- The FTC has requested additional information from Abbott Laboratories (NYSE:ABT) and St. Jude Medical (NYSE:STJ), which are attempting to complete a $25B deal combining two of the leading makers of heart-related devices.
- The request extends the waiting period - the time frame before companies can close a transaction - by 30 days.
Thu, Apr. 28, 6:56 AM
- Hot off the press: Abbott Labs (NYSE:ABT) acquires St. Jude Medical (NYSE:STJ) for $25B. Developing...
- Update: Under the terms of the deal, St. Jude shareholders will receive $46.75 in cash and 0.8708 of a share of Abbott common stock representing a total per-share value of $85. Abbott intends to fund the cash portion with medium- and long-term debt.
- The deal will be accretive to Abbott's non-GAAP EPS in the first year post close, adding $0.21 in 2017 and $0.29 in 2018. Anticipated pre-tax synergies should be $500M by 2020.
- The combined annual sales of the Abbott's cardiovascular business and St. Jude is ~$8.7B, with #1 or #2 market positions across almost every area in cardiovascular devices.
- Separately, Abbott plans to issue $3B of common stock in the secondary market to rebalance its capital structure. Timing has yet to be determined.
- Abbott will host a conference call this morning at 8:00 am ET to discuss the transaction.
- In premarket trading, ABT is down 5% and STJ is up 27%, both on robust volume.
Mon, Feb. 1, 8:07 AM
- Abbott Laboratories (NYSE:ABT) acquires point-of-care diagnostics firm Alere (NYSE:ALR) for $56 per share ($5.8B). The deal will be immediately accretive to earnings and is expected to add $0.12 - 0.13 to EPS in 2017 and more than $.20 in 2018. Annual pre-tax synergies should be ~$500M by 2019.
- Under the terms of the deal, Alere shareholders will receive $56 per share in cash. Abbott will also assume $2.6B in Alere outstanding debt.
- Waltham-MA-based Alere generates ~$2.5B in sales per year. Shares are up 46% premarket on light volume.
Aug. 27, 2015, 9:05 AM
- Abbott Laboratories (NYSE:ABT) has denied a report that it's preparing an offer for St. Jude Medical (NYSE:STJ) that would value the medical device maker at about $25B.
- St. Jude shares have now pared back their gains in early trading after surging 17% on the rumor.
- STJ +4.9% premarket
- Previously: FT: Abbott prepping $25B takeover offer for St. Jude (Aug. 27 2015)
Aug. 27, 2015, 7:18 AM
- Abbott Laboratories (NYSE:ABT) is preparing a takeover bid for St. Jude Medical (NYSE:STJ) that is likely to value the medical device maker at $25B, FT reports.
- Sources say the firm has been working with advisers for several weeks, lining up the financing for a cash and stock offer.
- Abbott and St. Jude already have a strong alliance in the field of cardiovascular devices, and a full merger would give the enlarged company greater leverage in negotiating with healthcare providers.
- STJ +13.2% premarket
- Update: Quoting a spokesperson, Bloomberg says Abbott isn't making an offer for St. Jude.
Jul. 30, 2015, 11:42 AM
- Abbott Laboratories (ABT -0.6%) acquires privately-held Roseville, MN-based Tendyne Holdings for $250M plus regulatory-based milestones. Abbott will pay $225M upfront to acquire the equity in Tendyne that it does not already own.
- Tendyne is developing a replacement tissue valve for the treatment of advanced mitral regurgitation that can be placed into the heart without the use of cardio-pulmonary bypass.
Apr. 22, 2015, 3:33 PM
- According to Bloomberg, Omnicare (OCR +7.4%) is reportedly working with financial advisors seeking a buyer. Company representatives have declined to comment. Trading halted.
- Consensus Q1 view is EPS of $1.01 on revenues of $1.6B.
- The company is currently embroiled in a lawsuit filed by the U.S. Department of Justice over alleged kickbacks from Abbott Labs (ABT +2.4%) in exchange for purchasing the dementia drug Depakote.
- Previously: DOJ sues Omnicare over alleged dementia drug kickbacks (Dec. 22, 2014)
Jan. 28, 2015, 12:38 PM
- The European Commission clears Mylan's (MYL -0.1%) $5.3B acquisition of Abbott's (ABT +0.7%) non-U.S. Developed Markets Specialty and Branded Generics Business. The EC is concerned that the transaction would potentially reduce competition so its approval is contingent upon the divestment of some of Mylan's businesses in Germany, the U.K., France, Ireland and Italy.
Dec. 12, 2014, 12:22 PM
- Abbott Laboratories (ABT -0.7%) finalizes its takeout of Russian pharmaceutical firm Veropharm. It acquired control of the company via its purchase of the holding company, Limited Liability Company Garden Hills, that owned ~98% of Veropharm, for 16.7B rubles (~$305M).
- Previously: Abbott to buy Russian pharma company (June 23, 2014)