Zoetis to acquire Abaxis for $2 billion
Point-of-care portfolio expands Zoetis veterinary diagnostics presence.
Zoetis and Abaxis have announced a merger agreement in which Zoetis will acquire Abaxis, a developer of diagnostic instruments for veterinary point-of-care services, for $83 per share in cash, or about $2 billion total. The acquisition is expected to enhance Zoetis' presence in veterinary diagnostics, an animal health category that's seen compound annual growth of about 10 percent over the last three years, according to a media release from both companies.
Abaxis is known for its VetScan portfolio of benchtop and handheld diagnostic instruments and consumables. Zoetis is primarily a provider of veterinary vaccines and medicines, with complementary lines in diagnostic products, genetic tests, biodevices and a range of services.
“Together we can bring more veterinarian customers a broader range of products that fit into our comprehensive solutions and innovations, from prediction and early detection of disease in animals to prevention and treatment,” says Zoetis CEO Juan Ramón Alaix in the release.
“We see a prime opportunity to grow our business as part of Zoetis,” says Clint Severson, Abaxis chairman and CEO. “We recently invested in expanding operations in Europe, Latin America and the Asia Pacific region, with 20 percent of revenue in fiscal year 2018 coming from our international operations. Zoetis has the global presence and direct veterinary customer relationships to deliver greater value to more customers around the world and accelerate the growth of our international operations.”
The veterinary diagnostics category, which includes reference laboratory and point-of-care diagnostics, is estimated to be more than $3 billion, according to the release. Zoetis expects the diagnostics category to continue to grow faster than the animal health industry, with growth in the mid to high single digits, driven by international adoption of point-of-care equipment due to rising medicalization rates, an increasing standard of veterinary care and the convenience of in-clinic testing.
The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Abaxis shareholders, the release states. Zoetis expects to complete the acquisition before the end of 2018.