Diagnostics maker Alere ($ALR) seemed to have closed one chapter after agreeing to sell out to Abbott ($ABT) last month. But some of the company's problems are coming back to haunt it as the U.S. Department of Justice (DOJ) investigates Alere's international sales practices.
The DOJ is asking the company to turn over documents regarding its sales practices in Africa, Asia and Latin America. Alere said that it's in the process of responding to the subpoena, which relates to the U.S. Foreign Corrupt Practices Act, Reuters reports.
As a result of the DOJ probe, Waltham, MA-based Alere will not be able to file its annual report for 2015 in time. The company is analyzing parts of the timing of revenue cutoff in Africa and China for 2013, 2014 and 2015, according to the Reuters story.
Still, Alere plans to close its deal with Abbott by the end of the year, it told the news outlet. In February, Abbott said that it would shell out about $5.8 billion for Alere to bulk up in point-of-care diagnostics.
|Abbott CEO Miles D. White|
"The combination of Alere and Abbott will create the world's premier point of care testing business and significantly strengthen and grow Abbott's diagnostics presence," Abbott CEO Miles White said at the time. "We want to offer our customers the best and broadest diagnostics solutions. Alere helps us do that."
Analysts did not see any "meaningful regulatory challenges" or obstacles that would prevent the deal from closing, Leerink analyst Dan Leonard said at the time of the agreement. But Alere has its own shady past, one that could complicate potential deals.
The company has struggled to bounce back from slumping revenues and lingering debt, and turned to dealmaking to dig itself out of the proverbial hole. Before striking a deal with Abbott, the company sold its BBI Diagnostics business to U.K. private equity firm Exponent Private Equity for $164 million. Alere also snatched up "substantially all" of drug-testing outfit US Diagnostics for $60 million to expand its offerings.
- read the Reuters story