TA Associates announced that it has partnered with management in a $175 million buyout of Alere Medical Incorporated, a leading disease management company.
Here are a few of my initial impressions:
- First, congratulations all around! This deal makes sense.
- The press release does not signal any major change in direction for Alere.
- On the contrary, Alere has many options for the future — going public or being acquired by a larger company are viable alternatives; timing is open. The DM market space is attracting ongoing interest from a wide range of health care and non-health care companies.
- This deal likely brings some liquidity for current investors and opens new sources of capital for the company’s future.
- The price seems “reasonable”. I’d ballpark the price/sales ratio as being somewhere in the 2.0 to 3.0 range. As a reference point, Healthways HWAY today is trading at 3.89 times sales. (Alere and TA executives, please feel free to share real numbers on this blog.)
- Disclosure: Dr. Gordon Norman, Exec VP and CMO at Alere, is an unpaid advisor to my blog.
- As compared to other DM companies, I’ve seen Alere as having a strong underlying medical focus. Three top executives at Alere are physicians; this is potentially a strong differentiator as physician groups are showing interest in reclaiming care coordination and chronic disease management capabilities.
Your thoughts?
Discussion
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