San Diego-based Quidel (NASDAQ: QDEL) has agreed to acquire Ortho Clinical Diagnostics Holdings (NASDAQ: OCDX) for $6 billion. Under the terms of the agreement, announced Dec. 23, Quidel will buy Ortho Clinical with a combination of cash and newly issued shares in the combined company.
Headquartered in New Jersey, Ortho Clinical Diagnostics is one of the world’s largest in vitro diagnostics companies. The company posted $1.8 billion in revenue in 2020. Quidel’s offer of $24.68 per share represents a 25% premium to Ortho shareholders based on OCDX’s closing price on December 22.
After the deal was announced, QDEL shares dropped 18% to $136 while OCDX rose 6% to $21 a share.
“The combination with Ortho will help solidify Quidel as a leader in the diagnostics industry, bringing together innovative, complementary products, solutions, and services that enhance the health and well-being of patients across the globe,” said Douglas Bryant, president and CEO of Quidel.
“Establishing a stronger leadership position, we expect the combined company will emerge as a global player with top-tier R&D; capabilities, a more diverse product pipeline, and broader geographic footprint,” Bryant added.
In 2020, Quidel posted $1.1 billion in revenue generated solely by its COVID-19 products while the company’s total revenue in FY 2020 increased 211% to $1.6 billion.
Complimentary Cultures
Bryant said the two companies’ “complementary cultures” are underpinned by a commitment to “our customers, patients and the communities we serve.”
“We are impressed by what Ortho has accomplished for patients. We look forward to joining together to continue the strong patient focus,” Bryant said.
Chris Smith, chairman and CEO of Ortho, also welcomed the deal and its “cross-selling” advantages.
“Quidel shares our commitment to customers and passion for the patients we serve. By bringing together Quidel’s point-of-care diagnostics with Ortho’s vast global reach, there is a substantial opportunity to capitalize on the cross-selling opportunities, move into attractive adjacent markets and accelerate innovative product expansion and the development of molecular technologies,” said Smith. “Together, we will continue to advance life-changing diagnostic solutions to improve patient outcomes and deliver economic benefits to the healthcare system.”
Uniting World-Class Technologies, Platforms
Company officials said the combined organization will unite “world-class technologies and platforms” to benefit customers with expanded access to clinical chemistry, immunoassay, molecular diagnostics, immunohematology, donor screening and point-of-care diagnostics offerings.
The combined company also will be poised to meet patient testing needs at all points of the care continuum – reference labs, hospitals, physicians’ offices, urgent care centers and at-home/retail locations.
Deal Includes $1.75B in Cash
Under the terms of the agreement, which was unanimously approved by the board of directors of each company, Quidel will acquire Ortho for $24.68 per share of common stock, for a total of approximately $6.0 billion, including $1.75 billion in cash, funded through cash on the balance sheet and incremental borrowings.
The combined company will also acquire Ortho’s existing net debt of $2 billion.
Following the close of the transaction, the combined company’s board of directors will consist of 12 members, eight designated by Quidel and four designated by Ortho.
Quidel’s Bryant will serve as chairman and CEO of the combined company. Joseph M. Busky will be the chief financial officer, Robert Bujarski will be president and chief operating officer, and Michael Iskra will be chief commercial officer.
The transaction, subject to regulatory and shareholder approval, is expected to close in the first half of 2022.
Ortho Clinical Diagnostics
Founded: 1939
CEO: Chris Smith
Employees: 4,500
Revenue: $1.8 billion (2020)
Headquarters: Raritan, New Jersey
Website: https://www.orthoclinicaldiagnostics.com/en-us/home/
Notable: Company operates in more than 130 countries.
Quidel
Founded: 1979
CEO: Douglas Bryant
Employees: 1,400
Revenues: $1.6 billion (FY 2020)
Headquarters: San Diego
Website: https://www.quidel.com/
Notable: Quidel was founded by Dr. David H. Katz and launched its first products in 1984.
