By Dhirendra Tripathi
Investing.com – Quidel stock (NASDAQ:QDEL) plummeted 15% Thursday on fears the company's purchase of Ortho Clinical Diagnostics (NASDAQ:OCDX) will lead to equity dilution and result in a more indebted entity.
The deal will be funded through a combination of cash and new shares. The combined entity will also take on Ortho’s debt of $2 billion.
Quidel will pay $24.68 for each share of Ortho, a 15% premium to its Thursday high of $21.5. Ortho’s stock jumped around 8%.
The transaction, likely to close by June, gives Ortho an equity value of around $6 billion.
Ortho shareholders will receive $7.14 in cash per share and 0.1055 shares of stock in the combined company for each Ortho share. They will own around 38% of the combined company.
Quidel’s equity base of 42 million shares had a market cap of around $7 billion at close Wednesday. Ortho’s about 237 million shares were valued at $4.7 billion.
Deals in the healthcare sector have accelerated, thanks to the pandemic. The Quidel-Ortho deal signals the rising importance of diagnostics in health management. Quidel is a maker of rapid tests, including those for Covid, that are used at the point-of-care or sold for home use. Ortho’s in-vitro diagnostics are used by hospitals, laboratories and blood banks.