(Bloomberg) — Quidel Corp. has agreed to purchase testing company Ortho Clinical Diagnostics Holdings for $6 billion with a combination for cash and newly issued shares.
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Quidel will pay $24.68 a share, a 25% premium over Ortho Clinical’s closing price on Wednesday, the companies said in a statement Thursday.
The deal signals the rising importance of diagnostics as demand for Covid-19 tests rises. Quidel is a leading maker of rapid tests, including for Covid, that are used at the point-of-care or sold for home use. Ortho’s in-vitro diagnostics are used by hospitals, clinical labs and blood banks.
Quidel shares plunged more than 15% when trading opened in New York. Shares of Ortho were up 6.4%.
The acquisition of Raritan, New Jersey-based Ortho will bring together the companies’ complementary diagnostic portfolios, technologies and platforms for everything from high-throughput systems to at-home testing, according to the statement.
“The combination with Ortho will help solidify Quidel as a leader in the diagnostics industry,” said Douglas Bryant, chief executive officer of San Diego-based Quidel. “We expect the combined company will emerge as a global player with top-tier R&D capabilities, a more diverse product pipeline, and broader geographic footprint.”
Bryant will serve as chairman and CEO of the combined company, according to the statement.
Quidel will pay $1.75 billion in cash, including incremental borrowings. It will acquire Ortho’s net debt of $2 billion. Quidel reported about $578 million in cash and equivalents as of Sept. 30.
The combined company will have 12 directors, eight from Quidel and four from Ortho, the companies said. The deal is expected to close in the first half of 2022.
(Updates with trading, additional details throughout)
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