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TPG and Blackstone Propose $16.7B Bid to Take Hologic Private - InforCapital

Private equity giants TPG and Blackstone have proposed a $16.3–$16.7 bn leveraged buyout to take Hologic private.

AM
Alvaro de la Maza

Partner at Aninver

Key Takeaways

  • Sector: Healthcare Healthtech & Medtech, Technology Software & Gaming.
  • Geography: United States.

Analysis

Private equity giants TPG and Blackstone have jointly proposed a leveraged buyout of Hologic, a leading U.S. medical technology company specializing in women's health diagnostics. The offer, valued between $16.3 billion and $16.7 billion, aims to take Hologic private at a significant premium over its current stock price.

Offer Details and Market Reaction: The proposed acquisition values Hologic shares at $70 to $72 each, substantially higher than the company's recent closing price of $54.28. Although Hologic has rejected the initial non-binding offer, discussions may resume in the future. Following news of the proposal, Hologic's stock surged over 15%, reflecting investor optimism about the potential deal.

Company Background and Financial Challenges: Hologic has faced a 24% decline in share value this year, attributed to tariffs and decreasing demand in certain segments. Despite these challenges, the company reported growth in its molecular diagnostics division, which includes sexual health and COVID-19 testing kits. However, revenues in the breast health division have waned. CEO Steve MacMillan acknowledged the macroeconomic challenges, including U.S. tariffs on China and Costa Rica, affecting operations.

Historical Context and Private Equity Interest: Hologic has been considered a takeover target since activist investor Carl Icahn acquired a 12.5% stake in 2013, leading to significant changes in the company's board and leadership. TPG and Blackstone, both experienced healthcare investors, previously attempted to acquire Bausch + Lomb. Their bid for Hologic underscores continued private-equity interest in major deals despite market uncertainties.

Future Outlook: While Hologic has declined the initial offer, the substantial premium and strategic interest from TPG and Blackstone suggest that further negotiations could occur. Investors and industry observers will be closely monitoring developments in this potential acquisition.