- Purchase price of US $83 per share in
cash, or approximately $2.0 billion in aggregate
- Enhances Zoetis’ presence in veterinary
diagnostics, a category of the animal health industry with
approximately 10% compound annual growth over the last three
years1
- Brings to Zoetis a proven line of
diagnostic instruments and consumables, providing a new platform
for growth that Zoetis can accelerate with sales of its products in
more than 100 countries
- Further enables Zoetis to support
veterinarians with comprehensive solutions to predict, prevent,
detect and treat diseases in animals
- Affirms strategy to deploy capital in
complementary, high-growth segments of animal health industry
Zoetis Inc. (NYSE:ZTS) and Abaxis, Inc. (NASDAQ:ABAX) today
announced a definitive merger agreement pursuant to which Zoetis
will acquire Abaxis, a leader in the development, manufacture and
marketing of diagnostic instruments for veterinary point-of-care
services for US $83 per share in cash, or approximately $2.0
billion in aggregate. 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 years1.
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the full release here:
https://www.businesswire.com/news/home/20180516005611/en/
Abaxis, founded in 1989 and headquartered in Union City, Calif.,
is a leading provider of diagnostic instruments and consumable
discs, kits and cartridges to the animal health industry. Abaxis
reported revenue of $244.7 million 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.
Acquisition Gives Zoetis a New Platform for Growth
“This acquisition brings Zoetis a company that has a proven,
competitive diagnostic platform for growth that we can help to
accelerate in the U.S. and worldwide with our global scale and
direct customer relationships in approximately 45 countries,” said
Juan Ramón Alaix, Chief Executive Officer of Zoetis. “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. We are very excited by the passion for customers
that Abaxis and Zoetis colleagues share.”
“We see a prime opportunity to grow our business as part of
Zoetis,” said Clint Severson, Chairman and Chief Executive Officer
of Abaxis. “We recently invested in expanding operations in Europe,
Latin America, and the Asia Pacific Region, with 20% 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.
This acquisition gives recognition to our record of success and the
highly skilled, dedicated employees of Abaxis who helped build our
company over the course of nearly three decades.”
Abaxis’ Veterinary Diagnostics Portfolio
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.
Abaxis 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% ($201.9 million) of its annual revenue in
fiscal year 2018 from diagnostic products and services for the
veterinary market. Approximately 16% ($38.6 million) 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% ($191.3
million) of Abaxis’ fiscal 2018 revenue. Abaxis has more than 580
employees worldwide.
Veterinary Diagnostics: A Growing and Vital Category of
Animal Health
The veterinary diagnostics category, which includes reference
laboratory and point-of-care diagnostics, is estimated to be more
than $3 billion1, with compound annual growth of 10% over the past
three years1. 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 diagnostic instruments due to rising medicalization
rates, increasing standard of veterinary care and the convenience
of in-clinic testing1.
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.
Wachtell, Lipton, Rosen & 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.
Webcast and Conference Call
Details
Zoetis and Abaxis will host a webcast and conference call at 8
a.m. (ET) today, during which company executives will discuss the
agreement and respond to questions from financial analysts.
Investors and the public may access the live webcast by visiting
the Zoetis website
at http://investor.zoetis.com/events-presentations. A replay
of the webcast will be archived and made available by May 17, 2018.
Investors and analysts may also dial-in by calling 877-876-9176 or
785-424-1667; Conference ID: ZTS0516.
About Zoetis
Zoetis is the leading animal health company, dedicated to
supporting its customers and their businesses. Building on more
than 60 years of experience in animal health, Zoetis discovers,
develops, manufactures and markets veterinary vaccines and
medicines, complemented by diagnostic products, genetic tests,
biodevices and a range of services. Zoetis serves veterinarians,
livestock producers and people who raise and care for farm and
companion animals with sales of its products in more than 100
countries. In 2017, the company generated annual revenue of $5.3
billion with approximately 9,000 employees. For more information,
visit www.zoetis.com.
About Abaxis
Abaxis is a worldwide developer, manufacturer and marketer of
portable blood analysis systems that are used in a broad range of
medical specialties in human or veterinary patient care to provide
clinicians with rapid blood constituent measurements. Abaxis’s
mission is to improve the efficiency of care delivery to and the
quality of life of patients in the medical and veterinary markets.
Abaxis provides leading edge technology and tools that support best
medical practices, enabling physicians and veterinarians to respond
to the health needs of their clients at the point of care while
operating economical and profitable practices. For more
information, visit http://www.abaxis.com.
Cautionary Statement Regarding Forward-Looking
Information
Statements included in this communication which are not
historical in nature or do not relate to current facts are intended
to be, and are hereby identified as, forward-looking statements for
purposes of the safe harbor provided by Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. The words “may,” “will,” “anticipate,” “could,”
“should,” “would,” “believe,” “contemplate,” “expect,” “estimate,”
“continue,” “plan,” “project” and “intend,” as well as other
similar words and expressions of the future, are intended to
identify forward-looking statements. Zoetis Inc. (“Zoetis”) and
Abaxis (“Abaxis”) caution readers that forward-looking statements
are subject to certain risks and uncertainties that could cause
actual results to differ materially from anticipated results. Such
risks and uncertainties, include, among others, the following
possibilities: the occurrence of any event, change or other
circumstances that could give rise to the right of one or both of
the parties to terminate the definitive merger agreement between
Zoetis and Abaxis; the outcome of any legal proceedings that may be
instituted against Zoetis or Abaxis; the failure to obtain
necessary regulatory approvals (and the risk that such approvals
may result in the imposition of conditions that could adversely
affect the combined company or the expected benefits of the
transaction) or Abaxis shareholder approval or to satisfy any of
the other conditions to the transaction on a timely basis or at
all; the possibility that the anticipated benefits of the
transaction are not realized when expected or at all, including as
a result of the impact of, or problems arising from, the
integration of the two companies or as a result of the strength of
the economy and competitive factors in the areas where Zoetis and
Abaxis do business; the possibility that the transaction may be
more expensive to complete than anticipated, including as a result
of unexpected factors or events; diversion of management’s
attention from ongoing business operations and opportunities;
potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement or
completion of the transaction; the ability to complete the
acquisition and integration of Abaxis successfully; and other
factors that may affect future results of Zoetis and Abaxis.
Additional factors that could cause results to differ materially
from those described above can be found in Zoetis’ Annual Report on
Form 10-K for the year ended December 31, 2017, which is on file
with the Securities and Exchange Commission (the “SEC”) and in
other documents Zoetis files with the SEC, and in Abaxis’ Annual
Report on Form 10-K for the year ended March 31, 2017, and
Quarterly Report on Form 10-Q for the quarter ended December 31,
2017, which are on file with the SEC and in other documents Abaxis
files with the SEC.
Important Additional Information
In connection with the proposed transaction between Zoetis and
Abaxis, Abaxis expects to file with the SEC a proxy statement of
Abaxis, as well as other relevant documents concerning the proposed
transaction. This communication is not a substitute for the proxy
statement or for any other document that Abaxis may file with the
SEC and send to its shareholders in connection with the proposed
transaction. The proposed transaction will be submitted to Abaxis’
shareholders for their consideration. Before making any voting
decision, shareholders of Abaxis are urged to read the proxy
statement regarding the transaction when it becomes available and
any other relevant documents filed with the SEC, as well as any
amendments or supplements to those documents, because they will
contain important information about the proposed transaction.
Shareholders of Abaxis will be able to obtain a free copy of the
proxy statement, as well as other filings containing information
about Zoetis and Abaxis, without charge, at the SEC’s website
(http://www.sec.gov). Copies of the proxy statement and the filings
with the SEC that will be incorporated by reference therein can
also be obtained, without charge, by directing a request to Abaxis,
Inc., 3240 Whipple Road, Union City, CA 94587, Attention: Corporate
Secretary; telephone (510) 675-6500, or from Abaxis’ website
www.abaxis.com.
Participants in the Solicitation
Abaxis, Zoetis and certain of their respective directors,
executive officers and employees may be deemed to be participants
in the solicitation of proxies in respect of the proposed
transaction. Information regarding Abaxis’ directors and executive
officers is available in Abaxis’ definitive proxy statement, which
was filed with the SEC on September 19, 2017, and certain of its
Current Reports on Form 8-K. Information regarding Zoetis’
directors is available in Zoetis’ definitive proxy statement, which
was filed with the SEC on April 2, 2018, and information regarding
Zoetis’ executive officers is available in Zoetis’ Annual Report on
Form 10-K for the year ended December 31, 2017, which was filed
with the SEC on February 15, 2018. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement to be filed with the SEC
in connection with the proposed transaction. Free copies of this
document may be obtained as described in the preceding
paragraph.
1 Based on internal estimates and publicly available
information
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180516005611/en/
Zoetis Media:Elinore White, 1-973-443-2835
(o)elinore.y.white@zoetis.comorBill Price, 1-973-443-2742
(o)william.price@zoetis.comorZoetis Investors:Steve
Frank, 1-973-822-7141 (o)steve.frank@zoetis.comorAbaxis Media
& Investors:Clint Severson, 510-675-6500 (o)
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