|Alere CEO Namal Nawana|
When Alere ($ALR) CEO Namal Nawana stepped in a year ago, he pledged he would get the struggling company back on track by shedding noncore businesses, cutting costs and focusing on high-performing areas. And Nawana seems to be delivering on that promise, as the company recently sold off its BBI Diagnostics unit, scooped up a new diagnostics company and nabbed an FDA CLIA waiver for its quick strep test, helping Alere distance itself from its troubled past.
The Waltham, MA-based company inked a deal to sell its BBI Diagnostics business to U.K. private equity firm Exponent Private Equity for $164 million, including up to $47 million in contingent consideration. The sale marks the end of a long chapter for Alere, as the company considered taking BBI public last year to pay down debt but nixed its plans in June citing equity market conditions in the U.K.
Alere is also snatching up "substantially all" of US Diagnostics for $60 million in cash to get its hands on the company's drug testing devices. Huntsville, AL-based USD already distributes Alere's toxicology products, and the acquisition helps the company deliver on its plans for growth in the field.
"With the divestiture of BBI and the acquisition of US Diagnostics, we continue to execute on our overall strategy, strengthening our core business areas and our balance sheet," Nawana said in a statement. "We expect the acquisition of USD to be immediately accretive, deliver strong returns on the capital invested and provide access to an expanded customer base with additional opportunities for selling other Alere Toxicology solutions and other business synergies."
Meanwhile, the company is looking to cardiometabolic and infectious disease diagnostics to swing its numbers northward. Alere this week snagged an FDA CLIA waiver for its rapid strep A test, allowing the product to be used in more healthcare settings while reducing the spread of infection, Avi Pelossof, the company's global president of infectious disease, said in a statement. The test, which was cleared by the FDA in April, uses a proprietary nucleic acid amplification technology to quickly pinpoint the infection in throat swabs, offering an advantage over other testing methods which often call for longer processing times.
The recent developments come amid change for Alere, as it struggles to bounce back from slumping revenues and the effects of lingering debt. Last year, a group of former company executives including ex-CEO Ron Zwanziger launched a $3.8 billion take-private offer, putting Alere in hot water with investors.
But in October, Alere sold its healthcare unit to Optum for $600 million in an effort to reduce its expenses and pay down debt. The company said at the time that it planned to put more unprofitable businesses on the chopping block, citing interest in its healthcare analytics unit.
- here's Alere's statement
- read more about the CLIA waiver