TPG to Buy Immucor for $1.9B

Manufacturer and seller of automated systems and reagents, Immucor Inc. (BLUD) recently announced that it will be taken over by private equity group TPG Capital for $1.97 billion. As per the terms of the agreement, Immucor’s shareholders will receive $27 in cash for each share of the company, representing a premium of 30.2% over the closing price of the stock on July 1, 2011 and a premium of approximately 35.6% to Immucor's average closing price over the last month. The deal is expected to be completed in the second half of 2011.

Following this announcement, shares of Immucor surged 30% to $26.99 on Tuesday. The deal, however, is subject to regulatory approval and the support of the owners of a minimum of 84% of Immucor's shares. TPG Capital will start issuing the tender for Immucor shares by July 15.

Established in 1992 with $48 billion of assets TPG Capital is a leading global private investment firm with offices spread across the globe.

Immucor suffered several setbacks over the past few quarters on the back of a slowdown in the blood industry. Several small donor centers have closed their operations due to lackluster demand arising from the economic uncertainty. Tighter hospital budgets and uncertainty in the healthcare market have affected orders and delayed decision making process. Moreover, higher number of uninsured and underinsured patients negatively influenced the demand in this industry.

Revenues from traditional reagents that account for 61% of the sales were impacted in the recent past. Immucor lost some traditional reagent customers due to its inability to provide the required services and attention as it was concentrating on instruments. The company was also suffering from several quality control issues.

In June 2011, Immucor’s President, CEO and a director Dr. Gioacchino De Chirico resigned from the company and was replaced by Joshua H. Levine (former President and CEO of Mentor Corporation).

Recently, the company revised its go-to-market strategy to counter the economic downturn as well as the competitive pressures that it had been experiencing in its traditional reagent business. With the acquisition, the investors are hopeful that TPG Capital will be able to expand Immucor’s blood-test equipments. Currently, we remain ‘Neutral’ on Immucor.

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