Roche to Buy Covid Test Maker GenMark for $1.8 Billion
(Bloomberg) -- Roche Holding AG agreed to buy GenMark Diagnostics Inc. for about $1.8 billion to gain a provider of fast tests for infectious diseases, including Covid-19.
The Swiss drugmaker will pay $24.05 a share in cash, it said in a statement Monday. That’s 30% more than Friday’s closing price. The boards of both companies approved the transaction.
GenMark’s tests can detect multiple pathogens from a single patient sample. The pandemic has fueled demand for tests that can swiftly diagnose Covid-19 and other diseases, kindling a wave of deal-making in the diagnostics field. The transaction is Roche’s largest since the takeover of Spark Therapeutics Inc. in 2019.
GenMark shares surged almost 50% last month after Bloomberg News reported that the company was fielding interest from other medical diagnostics companies. The stock closed at $18.50 on Friday. Roche rose 1% in early trading in Zurich on Monday.
Carlsbad, California-based GenMark makes panels that swiftly identify the most common viral and bacterial organisms linked to upper respiratory infections. Its products detect life-threatening bloodstream infections and antimicrobial-resistance genes.
The deal “will broaden our molecular diagnostics portfolio to include solutions that can provide lifesaving information quickly to patients and their health-care providers,” Thomas Schinecker, the chief executive officer of Roche’s diagnostics unit, said in the statement.
Revenue at GenMark surged 95% last year to $171 million, fueled by its ePlex system, which speeds up lab diagnoses. Sales in 2021 will probably grow by 10% to 15%, the company said last month.
Other recent transactions in the diagnostics industry include Thermo Fisher Scientific Inc.’s purchase of Mesa Biotech, which makes tests for the flu and strep as well as Covid-19, for about $450 million in cash. Quidel Corp. is also weighing a combination with Qiagen NV, Bloomberg News reported last month.
The GenMark takeover is expected to close in the second quarter. The company will continue to operate mainly out of its California headquarters.
Citigroup Inc. is acting as Roche’s financial adviser and Sidley Austin LLP is the Swiss company’s legal counsel. JPMorgan Chase is GenMark’s financial adviser while DLA Piper LLP is its legal counsel.
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