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Hologic (HOLX) Inks Deal to Acquire SuperSonic Imagine

Zacks Equity Research

Hologic, Inc. HOLX has recently made a binding offer to acquire (directly or through an affiliate) SuperSonic Imagine — a France-based innovator in cart-based ultrasound products.  Also, the company announced that it has signed an exclusive negotiation deal with SuperSonic Imagine and its primary shareholders.

The acquisition is in sync with the company’s strategy to provide wide-ranging screening, interventional and surgical solutions across the spectrum of breast health care.

Financial Terms

Under the terms of the binding offer, Hologic has agreed to acquire SuperSonic Imagine’s outstanding shares at €1.50 per share. This corresponds to all outstanding shares of approximately $39 million (or $42 million assuming dilution of all outstanding warrants and options). Further, Moreover, Hologic will generate funds to repay SuperSonic Imagine’s net debt of $43 million. Summing up, this equates to a maximum enterprise value of $85 million.

About the Acquisition

Through the acquisition of SuperSonic Imagine, the company is likely to foray into the $450-million cart-based global breast ultrasound market, which is expanding at a high-single-digit rate. The upside can be attributed to the technology being adopted as an adjunct to mammography in women with dense breast tissue. SuperSonic Imagine’s product portfolio will strengthen the utility of Viera, the wireless, handheld ultrasound scanner that Hologic is commercializing through a development and distribution agreement with Clarius Mobile Health.

Market Prospects

Per Global Market Insights, breast cancer therapeutics market size was valued at more than $416.22 billion in 2018 and is estimated to witness a CAGR of 9.5% from 2019 to 2025.

Recent Developments

In February 2019, Hologic announced that its LOCalizer wireless radio frequency identification (RFID) breast lesion localization system has been granted the CE Mark. The system is designed for convenient and accurate marking as well as targeting of lesions for breast-conserving surgery guidance. In January, the company announced that the FDA has approved the LOCalizer radiofrequency identification (RFID) marker for long-term placement. With this regulatory go ahead, the marker can now be implanted more than 30 days prior to a breast-conserving surgery. This will provide greater flexibility and convenience to patients as well as providers.

Earlier this year, Hologic announced the launch of Unifi Analytics in the United States, a business intelligence tool. The device enables healthcare facilities to manage their mammography devices, monitor technologist performance and avert unprecedented downtime via predictive tube replacement technology. 

Price Performance

The company has outperformed the industry in the past year. The stock has improved 24.3% compared with the industry’s 1.8% rise and the S&P 500’s 5% rise.

Zacks Rank and Other Key Picks

Hologic currently has a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader medical space are Cerner Corporation CERN, Penumbra PEN and Bruker Corporation BRKR. Each of these stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.

Cerner’s long-term earnings growth rate is expected to be 13.5%.

Penumbra’s long-term earnings growth rate is projected at 21.5%.

Bruker’s long-term earnings growth rate is estimated at 11.7%.

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