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Zoetis Clears US Antitrust Hurdle in Acquisition of Veterinary Point-of-Care Diagnostic Instruments Provider Abaxis
Tuesday 10 July 2018

10 July 2018 - The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has passed in connection with US-based animal health company Zoetis Inc.'s (NYSE: ZTS) pending acquisition of US-based diagnostic instruments provider Abaxis, Inc. (NASDAQ: ABAX), the company said.

In May, Zoetis announced a deal to acquire Abaxis for USD 83.00 per share in cash, or approximately USD 2bn in aggregate.

The expiration of the waiting period under the HSR Act satisfies one of the conditions necessary for the consummation of the transaction.

This transaction is subject to other customary closing conditions, including the approval of Abaxis shareholders.

Abaxis shareholders will vote on the transaction at a special meeting of shareholders currently scheduled to be held on July 31, 2018. Zoetis expects to complete the acquisition shortly after the Abaxis special meeting if all of the conditions to closing are then satisfied, and it intends to fund the purchase through a combination of existing cash and new debt.

The acquisition is expected to enhance Zoetis' presence in veterinary diagnostics, a category of the animal health industry with approximately 10% compound annual growth over the last three years.

Abaxis, founded in 1989 and headquartered in Union City, Calif., is a provider of diagnostic instruments and consumable discs, kits and cartridges to the animal health industry.

The company reported revenue of USD 244.7m for its fiscal year ended March 31, 2018, an increase of 8% compared to its 2017 fiscal year.

Its VetScan portfolio of benchtop and handheld diagnostic instruments and consumables serves a large customer base of veterinary practices in North America and is poised for expansion in international markets.

The Abaxis VetScan portfolio includes chemistry and hematology diagnostic instruments and companion discs, kits and cartridges, which are consumables that create a recurring revenue stream.

Abaxis recently launched the VetScan FLEX4 Rapid Test to detect Heartworm, Lyme, Ehrlichia and Anaplasma diseases in dogs, as well as its VetScan Canine Pancreatic Lipase Rapid Test, its UA urine chemistry instrument and the Urine Sediment Analyzer.

The company has a near-term pipeline of products, including an update to the capabilities of its VetScan FUSE, a bi-directional connectivity system that provides integration between Abaxis point-of-care instruments and veterinary practice management systems worldwide.

Abaxis derived 83% (USD201.9 m) of its annual revenue in fiscal year 2018 from diagnostic products and services for the veterinary market.

Approximately 16% (USD 38.6m) of the company's revenues were generated by sales of its Piccolo portfolio of analyzers and tests for the human medical market. Sales of consumables accounted for approximately 78% (USD 191.3m) of Abaxis' fiscal 2018 revenue.

Abaxis has more than 580 employees worldwide.

The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Abaxis shareholders. Zoetis expects to complete the acquisition before the end of 2018, and it intends to fund the purchase through a combination of existing cash and new debt.

Zoetis anticipates the transaction will have an impact on 2018 reported earnings related to customary closing activities; however, on an adjusted basis, the company does not expect a material impact. Zoetis will provide additional updates as the transaction progresses towards closing. Zoetis expects the transaction to be accretive to the company's earnings in 2019.

Zoetis is an animal health company, which discovers, develops, manufactures and markets veterinary vaccines and medicines, complemented by diagnostic products, genetic tests, biodevices and a range of services.

Wachtell, Lipton, Rosen and Katz is acting as legal advisor to Zoetis, and Guggenheim Securities and Barclays are acting as financial advisors. Cooley LLP is acting as legal advisor to Abaxis, and Piper Jaffray is acting as its exclusive financial advisor.
Details
Date Published: 10/07/2018
Target: Abaxis, Inc
Country: USA
Deal Size: 2bn (USD)
Sector: Healthcare
Type: Corporate acquisition
Financing: Cash
Status: Agreed
Vendor:
Buyer: Zoetis Inc
Buyer Advisor: Wachtell, Lipton, Rosen and Katz , Guggenheim Securities , Barclays
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