By a News Reporter-Staff News Editor at Investment Weekly News -- Alere Inc. (NYSE: ALR) announced plans to pursue an initial public offering in the United Kingdom of the ordinary shares of BBI Diagnostics Group plc, or BBI Diagnostics, a new subsidiary formed for purposes of the offering. It is anticipated that substantially all of the net proceeds of the offering, as well as the net proceeds of a new debt facility to be entered into by BBI Diagnostics at the time of the offering, would be used by Alere to pay down outstanding debt. The price range for the offering has not yet been determined, nor has the amount of new debt that BBI Diagnostics will issue.
BBI Diagnostics will apply to the United Kingdom Financial Conduct Authority, or FCA, for the shares to be admitted to the standard listing segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange.
Alere expects that it will sell a 25% ownership interest in BBI Diagnostics in the offering. In addition, BBI Diagnostics' debt facility, the proceeds of which will be paid to Alere as partial payment for the businesses comprising BBI Diagnostics, is expected to be funded at a level equal to approximately two to three times BBI Diagnostics' normalized earnings before interest, taxes, depreciation and amortization. It is currently expected that the initial public offering will take place around the end of the second quarter of 2014.
Ron Zwanziger, Chairman, Chief Executive Officer and President of Alere, said, "We are excited to announce our plans for an IPO of BBI Diagnostics, which we have been preparing for since last year. BBI Diagnostics is a valuable and growing business with a strong management team, but its lines of business are non-core to our focus on point-of-care products for the diagnosis and management of chronic disease. The transaction will allow Alere to deliver on its commitment to reduce debt through divestitures of selected non-core assets. We expect that the offering will provide Alere with substantial proceeds to pay down debt as well as the opportunity to benefit from potential increases in the value of our remaining ownership interest in BBI Diagnostics. Depending on market conditions and other factors, we may sell additional shares of BBI Diagnostics over time, which would allow us to continue to pay down debt with any proceeds. For the foreseeable future, we expect that we would retain a majority interest in BBI Diagnostics."
BBI Diagnostics is a diversified global diagnostics business focused on high value specialist markets. BBI Diagnostics develops, manufactures and distributes a broad range of reagents which can be used in numerous diagnostic tests and advanced laboratory diagnostic instruments. BBI Diagnostics also manufactures a number of other diagnostic products with applications in the healthcare and related industries.
BBI Diagnostics will include the following businesses, which Alere will transfer to BBI Diagnostics at the time of the offering: (i) substantially all of the operations of the BBI Holdings group of companies, most notably its diversified reagent manufacturing business, as well as its biothreat detection and healthcare businesses; (ii) the laboratory immunoassay business of the Axis-Shield group of companies; (iii) Alere's 50% interest in Swiss Precision Diagnostics GmbH, or SPD, a leading supplier of home pregnancy and fertility testing products sold under the ClearblueŽ and other brands as well as under private label; (iv) the First Check consumer diagnostics business; and (v) the Bionote animal health diagnostics business.
Keywords for this news article include: Alere Inc., Banking and Finance.
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