Quidel to Acquire Ortho Clinical for $6 billion to Diversify Diagnostics Portfolio
Covid-testing leader Quidel Corp. announces an agreement to acquire Ortho Clinical Diagnostics Holdings in a $6 billion bid, to expand its range of Covid-19 diagnostic tests.
At $24.68 per share of common stock, absorption of existing debt of $2 billion and $1.75 billion cash, the total consideration of the deal, valued at $6 billion, comes at a 25% premium of Ortho’s stock price as of 22 December 2021. Ortho’s stock prices went up by 7%, since the announcement. The merger has been approved by the boards of Quidel and Ortho and is expected to close in the first half of 2022, subject to regulatory approvals. With this deal, Quidel expects to increase revenue in excess of $100 million by 2025.
Pandemic-spurred growth of diagnostic companies
Quidel (Nasdaq: QDEL) is a California-based molecular diagnostics company formed in 1979. Since the pandemic, Quidel has been well-positioned and has captured the PCR-based Covid-19 testing market with multiplexed diagnostic kits for service providers. It successfully developed FDA-authorized, over the counter, point-of-care, rapid antigen kits such as QuickVue and Sofia, available at local pharmacies and department stores in the US and Europe. The acquisition of Ortho will expand Quidel’s range of Covid-19 testing products to accelerate growth, enhance R&D capabilities and diversify the product pipeline.
About Ortho and its COVID testing platforms
Ortho Clinical Diagnostics (Nasdaq: OCDX) is a global in-vitro diagnostics company, based in New Jersey, USA. Formed as Ortho Products, Inc in 1939, Ortho provides integrated and automated testing services to hospitals, clinical laboratories and blood banks. Ortho went public earlier this year, boosted by exceptional growth in 2020, thanks to its mass-scale Covid-19 testing platforms and kits.
“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 Chief Executive Officer of Quidel, who will serve as Chairman and Chief Executive Officer of the combined company.
The deal comes at a time when countries are ramping up testing due to the emergence of the omicron variant in the US and Europe. Quidel will benefit from leveraging Ortho’s global infrastructure to expand its markets beyond the US.
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