TA Associates Completes $175 Million Buyout of Alere Medical

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?