U.S. Diagnostics Firm GenMark Explores Sale Amid Interest

(Bloomberg) -- GenMark Diagnostics Inc. is exploring a sale after the U.S. firm was approached by potential buyers, according to people familiar with the matter.

GenMark is working with a financial adviser as it fields interest from other medical diagnostics companies, the people said, asking not to be identified because the deliberations are private.

Shares in GenMark soared as much as 32% Thursday to hit a record high of $22.19. They were up 26% to $21.32 at 10:47 a.m. in New York, giving the company a market value of $1.5 billion.

Deliberations are at an early stage, and the company could still decide against a sale, the people said. A representative for Carlsbad, California-based GenMark declined to comment.

The company could be a “solid fit” for large diagnostics firms including Hologic Inc., Becton Dickinson & Co., Thermo Fisher Scientific Inc. and Roche Holding AG, according to Cowen Inc. A deal price in the range of $20 to $25 per share “appears reasonable,” analysts including Doug Schenkel wrote in a research note Thursday.

“We have always viewed GNMK as an attractive takeover target,” the Cowen analysts wrote. “A larger strategic acquirer should be able to leverage a more extensive commercial reach to generate sales synergies.”

GenMark makes molecular diagnostic equipment to help detect infectious diseases including respiratory pathogens, and for blood culture identification. It’s the last remaining listed pure-play syndromic testing firm, and many potential acquirers are flush with cash due to Covid tailwinds, according to Cowen.

The company’s respiratory pathogen panels help identify the most common viral and bacterial organisms linked to upper respiratory infections, including the virus that causes Covid-19, according to its website. GenMark said last month it expects to report revenue of about $171 million for 2020, a 95% increase over the previous year.

Fidelity Investments, BlackRock Inc. and Vanguard Group are among its top shareholders, according to data compiled by Bloomberg.

A sale of GenMark could add to a wave of dealmaking activity among diagnostics companies, which have benefitted from the surge in demand for coronavirus testing. Quidel Corp. is weighing a combination with Qiagen NV, Bloomberg News reported this week. Last month, Thermo Fisher Scientific Inc. agreed to acquire Mesa Biotech, a privately-held molecular diagnostic company, for about $450 million in cash.

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