QGEN: Two suitors start formal due diligence as sale process advances
Two parties are now conducting formal due diligence on Qiagen, two people familiar with the matter said, as the molecular-diagnostics provider’s strategic review progresses.
The due diligence began last week, and a potential sale price of around $50 a share is being discussed, both people said.
Nothing is settled. The parties could walk away without making offers, and Qiagen could just as easily stay independent. The process is fluid, the people cautioned.
The timing is significant.
Qiagen is about to install Jonathan Pratt as CEO effective September 1, succeeding Thierry Bernard, who is stepping down as CEO and managing director but will stay on through the end of this year to help with the transition.
Pratt’s background is notable.
He was most recently president and CEO of Filtration Group, which he left after steering it through a sale to Parker Hannifin in August. Before that, he served in senior roles at Waters, at Beckman Coulter Life Sciences (a Danaher subsidiary) and at Pall. He also has a long track record working at private-equity-owned businesses.
"His experience is relevant as Qiagen’s supervisory board continues its strategic review," one person familiar with the matter said, "but that doesn't mean a transaction is imminent."
Qiagen has described the CEO search and the strategic review as related but separate tracks.
On its second-quarter earnings call in August, management said the two processes are “complementary but also independent”, with the review continuing as part of an effort to build shareholder value regardless of the leadership transition. Pratt is expected to be proposed as a managing director at an EGM in the fourth quarter.
Qiagen has been a takeover target for years.
Thermo Fisher Scientific agreed to buy it in 2020, but the deal collapsed when its raised tender offer did not meet its acceptance threshold. Since then it has remained high on everyone’s wish list of takeover targets.
Takeover interest began anew last month, when Bloomberg reported that EQT, Advent and KKR were among the private-equity firms interested and that some were considering offers north of $50 a share. At the time, talks were described as early and far from certain.
The current due-diligence process marks a step up from that earlier interest, the two people said.
The move tracks with CTFN's July 14 reporting, which first identified that Qiagen had hired a new CEO with a September start date.
CTFN also reported that the early financing paper was thin, with one banker calling it a “Swiss-cheese letter,” light on binding commitments, informal, and vague. That has since changed, according to the people familiar.
CTFN additionally reported that private-equity firms are the sole potential buyers, with strategics on the sidelines after years of circling Qiagen without acting. The dynamic now playing out is that private-equity suitors intend to split the company up after buying it, with strategics expected to be interested in sold-off parts.
At $50 a share, a deal would represent a 14% premium to the company’s closing price yesterday, August 24, valuing it near $10bn, depending on the final share count and structure.