Investors Skeptical of Qiagen-Quidel Merger but Believe GenMark Diagnostics Acquisition Rumor

With pandemic pain slowly residing and lab companies awash in COVID-19 testing revenues, it’s not surprising that the M&A cauldron is heating up. While volume has yet to rebound to pre-pandemic levels, we are seeing distinct rise in the number of deals in recent weeks. But perhaps the biggest M&A story in February is the buzz about the supposed blockbuster deals to come.

A Qiagen-Quidel Merger?

On Feb. 8, Bloomberg reported that two of the lab industry’s big “Qs,” Qiagen and Quidel, were in early merger discussions. The report cites unnamed sources as saying that Quidel approached Qiagen to gauge interest in joining forces. While both firms have successfully pivoted to meet the need for COVID-19 test products, there are strong concerns that current demands are unsustainable and that significant declines are imminent.

It sounds plausible enough. Qiagen’s molecular products fit nicely with Quidel’s point-of-care antigen and medical equipment portfolio. Qiagen has also been in play, having come within a whisker of being acquired by Thermo Fisher Scientific last year. However, the Bloomberg report was met with almost universal skepticism. Naturally, neither firm would comment on “rumors.” Quidel CEO Doug Bryant was somewhat noncommittal and noted that the company is always open to “opportunities to leverage our global infrastructure or contribute to our interest in digital and telehealth.” Qiagen CEO Thierry Bernard was sharper and more direct in his denials, suggesting that the merger would dilute the firm’s activities.

Wall Street analysts aren’t buying it, either. For one thing, because Quidel is so much larger, a merger would engulf Qiagen. And it’s not just size but what one William Blair analyst describes as the “lack of obvious revenue or operating synergies” between the firms. “Qiagen is more of a life sciences company that specializes in supplying raw materials, reagents and assays for molecular analysis with a ‘diagnostics tilt,’” the analyst suggests.

Acquisition Rumors Send GenMark Diagnostics Shares into Orbit

Qiagen-Quidel wasn’t the only Bloomberg diagnostics M&A story of note in February. The financial reporting firm also cited unnamed sources as suggesting that GenMark Diagnostics is putting itself up for sale. Predictably, GenMark declined to comment on rumors. However, the story apparently had much more credence with investors, who snapped up shares of the Carlsbad-California-based company the next day, causing the stock to rise 27 percent to $21.47.

Here’s a summary of the key new M&A diagnostic deals announced in March 2021:

MERGERS, ACQUISITIONS & ASSET SALES