Abbott, a global healthcare company, has announced its acquisition of Exact Sciences, a leader in the cancer screening and precision oncology diagnostics segments. The acquisition, valued at approximately $21 billion in equity, will enable Abbott to enter and lead in the fast-growing cancer diagnostics segments.
Exact Sciences is projected to generate more than $3 billion in revenue this year, with a high teens organic sales growth rate. Once the transaction is completed, Exact Sciences will become a subsidiary of Abbott, and Abbott’s total diagnostics sales will exceed $12 billion annually.
Exact Sciences' product offerings include the market-leading Cologuard® test, a noninvasive colorectal cancer screening option, and the Oncotype DX® test, which informs personalized treatment decisions for patients with breast cancer. Additionally, Exact Sciences offers liquid biopsy tests for multi-cancer early detection and molecular residual disease testing.
The acquisition is expected to be immediately accretive to Abbott’s revenue growth and gross margin. Following the closing, Exact Sciences will maintain its presence in Madison, Wisconsin, and Kevin Conroy, the chairman and chief executive officer of Exact Sciences, will remain with the company in an advisory role to support the transition into Abbott and accelerate its global impact in helping to eradicate cancer worldwide.
Under the terms of the agreement, Abbott will acquire all outstanding shares of Exact Sciences for $105 per common share in cash, at a total equity value of approximately $21 billion and an estimated enterprise value of $23 billion. Abbott’s financing contemplates absorption of Exact Sciences’ estimated $1.8 billion of net debt.
The market has reacted to these announcements by moving the company's shares -2.96% to a price of $126.15. For more information, read the company's full 8-K submission here.
