Beckman’s Bow Out
Beckman Coulter’s dropping of its bid for San Diego’s Biosite was a coming to senses by a company that could have prevailed in the bidding war.
Shareholders in winning bidder Inverness Medical Innovations of Massachusetts should be so lucky.
Medical testing companies Beckman and Inverness had tangled over Biosite for more than a year, long before the chase went public in March with Beckman’s original $1.55 billion offer.
A handful of offers later, Biosite is set to go to Inverness for $1.6 billion, or 67% more than what the company was trading at before Beckman’s original offer, itself a 50% premium.
To the victor belong the spoils. Inverness, a maker of medical tests and consumer healthcare products, is set to get Biosite’s coveted heart diagnostic and other tests.
But it’s set to pay dearly for them. Inverness’ offer for Biosite represents 86% of its market value as of last week, as the Business Journal’s Vita Reed reports in her page 1 story.
Beckman would have spent the equivalent of 40% of its market value on Biosite, a prospect that alarmed some analysts worried about debt.
Inverness watchers must be downright scared. The company’s shares are off more than 10% since the public bidding war started in early April.
The company stands to go from a relatively light $150 million in debt as of March 31 to something multiples greater. Inverness has lined up $1.75 billion in financing to buy Biosite.
In late April, Moody’s Investors Service put Inverness’ debt ratings under review with the likelihood of a downgrade.
In a way, it’s sad to see the chase end. The bidding war made for great stories. We now pass the baton to those who follow Inverness more closely. You’ve got a great story yet to write on how a big gamble paid off, or how acquisition zeal got the better of the company.
Wayne’s World
An irony worth noting: the new Gateway in Sarah Tolkoff’s page 1 story looks a lot like the old Gateway under former boss Wayne Inouye.
Ed Coleman, the PC maker’s boss since September, is taking a cue from Inouye by stressing sales via big retailers and backing away from Gateway’s floundering bid to sell more computers directly to businesses and consumers.
Inouye, abruptly shown the door in early 2006 after restoring Gateway to profitability, surely must feel vindicated.
,Michael Lyster
