Shares of Quidel Corporation (NASDAQ:QDEL), a molecular diagnostics specialist with a focus on quick turnarounds, ticked up 9.3% as of 11:26 a.m. EDT on Tuesday in response to a positive development concerning a recent agreement with Alere Inc. (NYSE: ALR). Investors are pleased with a revision that will tack on global rights to sales of a test and the equipment that runs it.
To satisfy antitrust regulators scrutinizing Abbott's acquisition of Alere, the latter must divest some assets. Earlier this summer, Quidel agreed to scoop up Alere's Triage MeterPro cardiovascular and toxicology assets, along with its business developing B-type Naturietic Peptide (BNP) assays, which are run on Beckman Coulter analyzers and test for heart failure, for $400 million up front and $40 million in contingent consideration.
After the bell yesterday, Quidel announced it would also acquire global commercialization rights to the BNP business for an additional $240 million in deferred consideration. Investors are pleased with the revision because it looks like Quidel picked up the rights at a fire-sale price. During the 12-month period ended this June, the BNP business generated an estimated $107 million in revenue.
The sale to Quidel is contingent on Abbott completing its acquisition of Alere. The diagnostics giant expects to close by the end of the month, and Quidel expects its deal with Alere to close within 30 days of the larger acquisition.
Quidel stock has risen more than 60% since the original deal with Alere was announced, but investors might want to remain cautious. The company might be getting Alere's assets at a fair price, but it will take on more debt to finance a portion of the deal. The company finished the second quarter with $151 million in long-term debt, which is already an awful lot for a company with operations that have dipped in and out of profitability a few times over the past several years.