Here's Why Quidel Corporation Is Rising Today
Shares of Quidel Corporation (NASDAQ: QDEL), a company focused on diagnostic testing equipment, rose 11% as of 11:45 a.m. EDT on Tuesday in response to the announcement that it is acquiring a few product lines from Alere (NYSE: ALR).
Quidel stated on Monday that it has signed a deal to buy Alere's Triage MeterPro cardiovascular and toxicology assets as well as the company's B-type Naturietic Peptide (BNP) assay business. Alere is divesting these product lines in an effort to appease regulators so they will bless the company's upcoming takeover by Abbott Laboratories.
This represents a sizable deal for Quidel since Alere's Triage and BNP business lines generated about $197 million in total revenue last year. For comparison, Quidel's revenue in 2016 was only $191 million, so this deal will single handily double the company's top line. What's more, Quidel negotiated a price of only $400 million for this transaction plus another $40 million in contingent consideration, which values this deal at about 2.2 times sales. That's less than half of Quidel's current price-to-sales ratio of 5.9, so it appears that the company is buying these product lines at a very good price.
Source: Fool.com
Abbott Laboratories Stock
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