Gen-Probe-Hologic Deal Moves Ahead

In relation to its acquisition by Hologic Inc. ( HOLX - Analyst Report ) , Gen-Probe Inc. ( ) revealed that the federally required 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) ended on June 19. The companies were not required to provide any additional information to the Federal Trade Commission. Following the expiry of the waiting period, the companies can now proceed with the closure of the deal.

The HSR Act, an amendment to U.S.’s antitrust law, requires companies to submit a detailed filing with the U.S. Department of Justice and Federal Trade Commission for mergers and acquisitions. The agencies ensure that the merger does not impact the nation’s commerce adversely.

Gen-Probe, on April 30, announced its takeover by women’s healthcare major Hologic for $3.7 billion (or $82.75 a share). The transaction is expected to complete by third quarter of 2012. Gen-Probe believes that the merger will leverage the women’s Diagnostic product range of both the companies and thereby increase the focus on the molecular diagnostics market. Further, the acquisition will benefit the shareholders as it will offer additional cash value to their shares.

Both the companies disclosed that the integration process is moving smoothly and a planning team is vigorously working on important issues regarding proper synthesis of every aspect of the business. However, the transaction is subject to certain clearances and approval from the German Federal Cartel Office.

Perella Weinberg Partners and Goldman Sachs ( GS - Analyst Report ) have been appointed financial advisors for Hologic while Morgan Stanley & Co. LLC, a wholly-owned subsidiary of Morgan Stanley ( MS - Analyst Report ) , will fulfill the same responsibilities for Gen-Probe. On the other hand, Jones Day and Brown Rudnick LLP are acting as legal advisors for Hologic while Skadden, Arps, Slate, Meagher & Flom LLP and Cooley LLP will act as legal advisors for Gen-Probe.

Gen-Probe is a dominant player in the rapidly expanding nucleic acid testing (“NAT”) market, the fastest growing segment in the clinical diagnostic market. The company is a market leader in domestic gonorrhea and chlamydia testing with its PACE and APTIMA assay product lines.

Gen-Probe competes with more established firms in the molecular diagnostic industry such as Roche ( RHHBY ) , Becton, Dickinson ( BDX - Analyst Report ) and Abbott Labs ( ABT - Analyst Report ) . Currently, we have a long-term Neutral recommendation on Gen-Probe, which is in tandem with a short-term Zacks #3 Rank (Hold).