DiaSorin SpA, Saluggia, Italy, is set to purchase Focus Diagnostics Inc, Cypress, Calif, the immunology and molecular diagnostics arm of Quest Diagnostics, Madison, NJ, for $300 million in cash.
Under the terms of the agreement, DiaSorin will acquire all of Focus’ tangible and intangible assets used to develop, manufacture, and distribute its molecular diagnostic and enzyme-linked immunosorbent assay (ELISA) products. The deal does not include Quest’s diagnostic information service laboratories currently operating under the Focus Diagnostics brand. Those labs primarily serve hospital and biopharmaceutical companies, and will continue to be based in San Juan Capistrano, Calif, as part of Quest.
As a result of the acquisition, DiaSorin will have access to a new set of molecular products cleared for distribution in both the United States and Europe. Focus’ product lines include the Simplexa molecular product line, HerpeSelect herpes simplex virus serology, and the line of DxSelect immunofluorescence antibody and ELISA tests. DiaSorin expects to leverage its global commercial infrastructure to help the Focus business expand outside the United States.[reference float=”right”] Rationale for Acquisition
Upon announcing its plans to acquire Focus’ products business, DiaSorin shared the following as reasons behind its decision:
- It will allow the company to compete in the molecular diagnostics segment with a set of specialty products, a market that is experiencing rapid growth in the United States and in Europe.
- The company has a strategy to strengthen its presence in the US market, with the aim of making the US 50% of the total company turnover in the near future.
- The acquisition provides access to a qualified US customer base consisting of approximately 200 large hospitals. DiaSorin seeks to increase its penetration in this segment with its current Liaison products.
- Focus products also include a competitive catalogue of specialty ELISAs that can be added to the DiaSorin product line and effectively distributed on DiaSorin’s ELISA instrumentation in all regions where these products have a large potential, such as Asia and South America. [/reference]
DiaSorin will continue to manufacture Focus products from the company’s base facility in California, with the approximately 180 Focus employees currently employed in manufacturing, research and development, sales and marketing, and administration.
“The combination of DiaSorin and Focus products will create a unique portfolio of specialty products, especially in the clinical area of infectious disease, which will continue to strengthen the leadership of DiaSorin in this segment that today already represents over 50% of DiaSorin revenues,” says Carlo Rosa, CEO of DiaSorin. “Also, this acquisition offers DiaSorin access to a large number of premier US hospitals that are served today by Focus, a market segment that is strategic for DiaSorin to grow in the future by combining the Focus molecular products with its broad Liaison product line.”
“As a leader in diagnostic products, DiaSorin is well positioned to build on the Focus platform of innovation to deliver continuing value to Focus’ employees, customers, and patients,” says Steve Rusckowski, president and CEO of Quest Diagnostics. “This transaction reflects our ongoing commitment to refocusing on Quest’s core diagnostic information services business. We remain committed to delivering disciplined capital deployment, the fifth element of our five-point strategy. We return the majority of our free cash flow to investors in the form of dividends and share repurchases, and also have been investing in the business through strategically aligned acquisitions.”
The acquisition is expected to be completed in the second quarter of 2016 through a newly created US affiliate.
Additional terms were not disclosed.