Shawshank, VA 4/30/12 (StreetBeat) -- Medical device maker Hologic Inc. (Nasdaq: HOLX) has agreed to buy diagnostic test maker Gen-Probe Inc. (Nasdaq: GPRO) for about $3.72 billion in an all-cash deal, expanding its portfolio of tools for detecting diseases.Hologic said Monday that it will pay $82.75 for each share of Gen-Probe, a 20 percent premium over Gen-Probe's closing stock price of $68.71 on Friday. Its shares climbed almost 19 percent in morning trading.
The deal has been approved by the boards of both companies but still must be approved by Gen-Probe shareholders.
The announcement came the same day the companies posted quarterly financial results. Bedford, Mass.-based Hologic reported a net loss of $40.3 million, or 15 cents per share, in its fiscal second quarter as expenses rose. Gen-Probe, based in San Diego, reported a 3 percent decline in its first-quarter earnings.
Gen-Probe shares climbed $13.02, or 18.9 percent, to $81.73 in morning trading. Hologic shares fell $1.78, or 8.4 percent, to $19.45.
Gen-Probe provides molecular diagnostics products and services, including several tests for sexually transmitted diseases. Hologic said the company will be a "highly complementary addition" to its diagnostics portfolio. It also said the deal will advance its core focus on women's health and establish it as a premier company in STD diagnostics.
The companies expect the deal to close in the second half of this year. Gen-Probe would become a wholly owned subsidiary of Hologic. Based on Gen-Probe's approximately 45 million outstanding shares, the deal is worth about $3.72 billion.
Hologic said it expects the addition of Gen-Probe to boost its adjusted earnings by about 20 cents in the first fiscal year after the deal closes and significantly more after that.
Hologic's loss in the quarter that ended March 24 compares to net income of $82.4 million, or 31 cents per share, in the same quarter a year ago. Revenue climbed more than 7 percent to $471.2 million.
Adjusted earnings, which exclude several one-time charges and gains, were 33 cents per share.
Analysts expected Hologic would earn 33 cents per share on revenue of $474 million, according to a FactSet survey.
Hologic said its costs and expenses climbed 63 percent in the quarter to $461 million. It recorded a $42.3 million non-cash loss on the exchange of convertible notes in the quarter and an $18.3 million charge tied to its decision to stop selling the Adiana permanent contraception system.
In its earnings report, Gen-Probe said Monday its first-quarter net income fell to $22.5 million, or 49 cents per share, from $23.3 million, or 48 cents per share, a year earlier. Total revenue grew 7 percent to $153.4 million, and adjusted earnings were 55 cents per share.
Analysts expected, on average, adjusted earnings of 51 cents per share on $150.7 million in revenue from Gen-Probe.
Hologic said it will fund its Gen-Probe acquisition with available cash and debt. It has secured financing from Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC.
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