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    DIA   IT0003492391

DIASORIN S.P.A.

(DIA)
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DiaSorin strikes $1.8 bln Luminex deal to dodge 'COVID cliff'

04/12/2021 | 05:02am EDT

* DiaSorin agrees to buy Luminex for $1.8 bln in cash

* Luminex a leader in fast-growing multiplex diagnostics

* DiaSorin shares up 8.5%

MILAN, April 12 (Reuters) - Italian diagnostics firm DiaSorin has agreed to buy U.S. rival Luminex Corp for $1.8 billion in a move that could boost its molecular business and offset a potential drop in demand for COVID-19 tests as the pandemic is brought under control.

The pandemic has fuelled rapid growth at Diasorin's molecular division, which in 2020 accounted for 29% of sales. But as the rollout of COVID-19 vaccines progresses, some analysts have raised concern about a possible drop in demand for COVID-19 molecular tests once the emergency is over.

"We believe this opportunity will ... help DiaSorin to address the 'COVID cliff'... even in future years when demand for COVID-19 tests has largely vanished," a Milan-based analyst said of the Luminex deal.

DiaSorin shares were up 8.5% at 1100 GMT.

Texas-based Luminex is a leader in so-called multiplex diagnostics, which can detect multiple illnesses or viruses from a simple sample. It's the industry’s fastest-growing segment.

"Luminex perfectly fits with our strategy to grow our positioning in the molecular diagnostics space, to broaden our presence in the U.S. and to create additional value through Life Science offerings," Diasorin Chief Executive Carlo Rosa said.

The deal, which grows DiaSorin's footprint in the key U.S. market, follows a similar acquisition by diagnostics rival Roche , which bought GenMark Diagnostics in a $1.8 billion deal to fill a testing portfolio gap.

Broker Jefferies said the Luminex deal was reasonably priced at 17.5 times expected 2021 core profit, broadly in line with current trading multiples for global diagnostics peers.

Under the terms of the agreement unveiled on Sunday evening, Luminex shareholders will receive $37 in cash for each share, compared with Friday's closing price of $32.95.

DiaSorin said that represented a premium of 23% when calculated versus the unaffected closing price on Feb. 24, a day before rumours emerged about a potential sale.

Shares in the U.S. firm are up 42.5% this year.

DiaSorin had flagged the potential acquisition earlier this year, with Rosa saying in March the group had the ambition to grow and was waiting for an opportunity to materialise.

Luminex will be merged with a newly formed U.S. subsidiary of DiaSorin. The combined group would have had 2020 revenues of around $1.5 billion.

DiaSorin said it would fund the deal through a mix of cash and external financing and guided for an immediate positive impact on its earnings per share.

(Additional reporting by Giulia Segreti and Valentina Za; Editing by Jan Harvey and Mark Potter)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
COMBINED GROUP CONTRACTING COMPANY - K.S.C. (PUBLIC) 1.29% 0.315 End-of-day quote.56.72%
DIASORIN S.P.A. 1.66% 140.8 Delayed Quote.-17.23%
GENMARK DIAGNOSTICS, INC. 0.00% 24.04 End-of-day quote.64.66%
LUMINEX CORPORATION -0.14% 36.86 Delayed Quote.59.43%
ROCHE HOLDING AG 1.22% 303.2 Delayed Quote.-1.88%
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Financials
Sales 2021 1 084 M 1 319 M 1 319 M
Net income 2021 321 M 391 M 391 M
Net cash 2021 527 M 640 M 640 M
P/E ratio 2021 24,7x
Yield 2021 0,93%
Capitalization 7 702 M 9 361 M 9 368 M
EV / Sales 2021 6,62x
EV / Sales 2022 7,08x
Nbr of Employees 2 045
Free-Float 40,4%
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Technical analysis trends DIASORIN S.P.A.
Short TermMid-TermLong Term
TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 10
Average target price 161,56 €
Last Close Price 140,80 €
Spread / Highest target 39,9%
Spread / Average Target 14,7%
Spread / Lowest Target -20,5%
EPS Revisions
Managers and Directors
NameTitle
Carlo Rosa Chief Executive Officer, Executive Director & GM
Piergiorgio Pedron Chief Financial Officer & Senior Corporate VP
Gustavo Denegri Chairman
Franco Moscetti Independent Director
Giuseppe Alessandria Lead Independent Director
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