Alere (ALR - Snapshot Report) , a medical products company focused on integrating rapid diagnostics with health management, recently reported its binding agreement to buy eScreen for a base consideration of $270 million in cash. eScreen is a prominent technology oriented company with a focus on employee health products and toxicology screening.
eScreen, based in Overland Park, KS, deploys a well-regarded automated platform and FDA-authorized reader for the gathering, handling and reporting of non-regulated and regulated urine drug screens. eScreen also sells a set of employee-related health testing solutions. The company had sales of about $120 million in fiscal 2011.
The base consideration is subject to usual adjustment for working capital and subsequent contingent consideration may reach another $70 million. Subject to usual closing conditions, the deal is scheduled to close within 45 days.
According to Alere, the company strengthens is role in the global toxicology market, with the acquisition of eScreen. The takeover also strategically places Alere to deliver a wide array of diagnostics to employers.
Diagnostic tests are shifting closer to the consumers and into the home testing market, as more diagnostic tests are being developed to monitor patients rather than simply diagnose them. Alere's strategy of combining disease management with point-of-care testing (“POCT”), in a manner that encourages patients to take responsibility over their overall health care, is viewed as a prudent approach while at the same time ensuring affordability.
In addition to growing its revenues through a combination strategy of continued acquisitions and measured organic growth, the company is committed to improving its operating margin. Further, its product pipeline is strong, which has been developed through a combination of internal R&D as well as serial acquisitions. One of the company’s competitors is Abaxis (ABAX - Analyst Report) .