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Hologic (HOLX) Boosts Diagnostics Portfolio With New Buyout
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Hologic, Inc. (HOLX - Free Report) continues to follow its tuck-in merger and acquisition strategy as is evident from its recent acquisition of Diagenode. Per the terms of the transaction, Hologic acquired Diagenode for an amount of about $159 million, subject to working capital and other customary closing adjustments.
The acquisition of Diagenode along with the previous buyout of Biotheranostics will allow Hologic to fortify its solid diagnostics business to boost growth after the COVID-19 pandemic.
This development is likely to strengthen Hologic’s diagnostics business and accelerate growth post-COVID.
Diagenode at a Glance
Diagenode, the European-based developer of molecular assays and epigenetics products, provides above 30 real-time polymerase chain reaction (PCR) tests that are CE-marked for the identification of bacteria, parasites and viruses involved in sexually transmitted infections, respiratory diseases, meningitis and gastroenteritis.
Notably, Diagenode previously partnered with Hologic to develop Panther Fusion assays for group B Streptococcus and Bordetella.
Significance of the Acquisition
The buyout will help Hologic to further strengthen its molecular diagnostics business through expansion of its international capabilities, enhancement of regional time-to-market and offering of a broader and more differentiated test menu.
Historically, Hologic's diagnostic business exhibited excellent momentum in the United States and internationally. The buyout will further allow Hologic to advance and widen the efforts involved in the development and manufacturing of PCR-based assays to benefit its customers and patients.
The acquisition is anticipated to be approximately break-even to Hologic’s adjusted earnings per share till 2022 and prove accretive thereafter.
Recent Developments
In February 2021, Hologic acquired Biotheranostics for approximately $230 million. The buyout enables Hologic to expand in the growing Oncology market. The transaction will help Hologic to further leverage its commercial capabilities and expertise in molecular diagnostics automation to accelerate growth, help physicians make more informed decisions and deliver better clinical outcome for more women.
During the same month, Hologic entered into a multi-year strategic collaboration with Google Cloud to advance next generation digital diagnostic capabilities. The collaboration is focused on enhancing artificial intelligence and machine learning to bring about breakthrough results in cervical cancer screening.
Industry Prospects
Per a report by Grand View Research, the global molecular diagnostics market size was valued $9.2 billion in 2019 and is anticipated to reach $18.2 by 2027, at a CAGR of 9.0%. Technological advancements in molecular diagnostics are anticipated to substantially drive the market as they facilitate cost-effectiveness, accuracy and portability. Hence, this buyout is a well-timed one.
Price Performance
Shares of the company have surged 58% in a year’s time compared with the industry’s growth of 25.7%.
AngioDynamics has a projected long-term earnings growth rate of 133%.
IDEXX Laboratories has a projected long-term earnings growth rate of 16%.
Bioanalytical Systems has a projected long-term earnings growth rate of 15%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Hologic (HOLX) Boosts Diagnostics Portfolio With New Buyout
Hologic, Inc. (HOLX - Free Report) continues to follow its tuck-in merger and acquisition strategy as is evident from its recent acquisition of Diagenode. Per the terms of the transaction, Hologic acquired Diagenode for an amount of about $159 million, subject to working capital and other customary closing adjustments.
The acquisition of Diagenode along with the previous buyout of Biotheranostics will allow Hologic to fortify its solid diagnostics business to boost growth after the COVID-19 pandemic.
This development is likely to strengthen Hologic’s diagnostics business and accelerate growth post-COVID.
Diagenode at a Glance
Diagenode, the European-based developer of molecular assays and epigenetics products, provides above 30 real-time polymerase chain reaction (PCR) tests that are CE-marked for the identification of bacteria, parasites and viruses involved in sexually transmitted infections, respiratory diseases, meningitis and gastroenteritis.
Notably, Diagenode previously partnered with Hologic to develop Panther Fusion assays for group B Streptococcus and Bordetella.
Significance of the Acquisition
The buyout will help Hologic to further strengthen its molecular diagnostics business through expansion of its international capabilities, enhancement of regional time-to-market and offering of a broader and more differentiated test menu.
Historically, Hologic's diagnostic business exhibited excellent momentum in the United States and internationally. The buyout will further allow Hologic to advance and widen the efforts involved in the development and manufacturing of PCR-based assays to benefit its customers and patients.
The acquisition is anticipated to be approximately break-even to Hologic’s adjusted earnings per share till 2022 and prove accretive thereafter.
Recent Developments
In February 2021, Hologic acquired Biotheranostics for approximately $230 million. The buyout enables Hologic to expand in the growing Oncology market. The transaction will help Hologic to further leverage its commercial capabilities and expertise in molecular diagnostics automation to accelerate growth, help physicians make more informed decisions and deliver better clinical outcome for more women.
During the same month, Hologic entered into a multi-year strategic collaboration with Google Cloud to advance next generation digital diagnostic capabilities. The collaboration is focused on enhancing artificial intelligence and machine learning to bring about breakthrough results in cervical cancer screening.
Industry Prospects
Per a report by Grand View Research, the global molecular diagnostics market size was valued $9.2 billion in 2019 and is anticipated to reach $18.2 by 2027, at a CAGR of 9.0%. Technological advancements in molecular diagnostics are anticipated to substantially drive the market as they facilitate cost-effectiveness, accuracy and portability. Hence, this buyout is a well-timed one.
Price Performance
Shares of the company have surged 58% in a year’s time compared with the industry’s growth of 25.7%.
Zacks Rank and Other Key Picks
Currently, Hologic carries a Zacks Rank #2 (Buy).
A few same-ranked stocks from the broader medical space are AngioDynamics, Inc. (ANGO - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Bioanalytical Systems, Inc. . You can see the complete list of Zacks #1Rank (Strong Buy) stocks here.
AngioDynamics has a projected long-term earnings growth rate of 133%.
IDEXX Laboratories has a projected long-term earnings growth rate of 16%.
Bioanalytical Systems has a projected long-term earnings growth rate of 15%.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>