Tuesday, Gen-Probe Inc. (GPRO) revealed a definitive agreement to acquire Prodesse, Inc., a privately held company involved in molecular testing for influenza and other infectious diseases, for about $60 million in cash. The purchase price could increase up to $85 million if Prodesse achieves certain financial and regulatory milestones within the next couple of years.
The transaction is expected to provide immediate boost to Gen-Probe's non-GAAP earnings and revenue growth rate, and is expected to close within a month.
Carl Hull, Gen-Probe's president and chief executive officer said, "We believe acquiring Prodesse supports our strategic focus on commercializing differentiated molecular tests for infectious diseases. The acquisition is expected to boost our near-term earnings and revenue growth by providing additional leading-edge assays for our experienced sales force to promote to our global customer base."
The agreement provides that Gen-Probe sales force will begin co-promoting Prodesse's products in mid-October in the United States, Canada and Europe.
The acquisition by Gen-Probe will improve in developing and commercializing molecular assays that help doctors and laboratories diagnose respiratory and other infectious diseases more accurately than traditional methods. Prodesse is confident that it can prepare for and accelerate next stage of growth by leveraging the resources and expertise of one of the most established and highly respected molecular iagnostics companies in the world.
Excluding the charges Gen-Probe's initial expectation is that the acquisition will add approximately $0.05 per share to its 2010 earnings, based on approximately $15 million in total revenues.
GPRO closed Tuesday's regular trading at $42.64, up $0.81 or 1.94%, on a volume of 0.783 million shares on the Nasdaq. In afer hours, the stock gained $0.46 or 1.08%, trading at $43.10.
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