Meridian to Acquire Otsuka’s North American BreathTek Business for $20M

Diagnostic testing solutions provider Meridian Bioscience, Inc. (VIVO), recently announced that it has entered into a definitive agreement to acquire Otsuka America Pharmaceutical’s North American BreathTek business for $20 million. The deal is likely to close in Meridian’s fiscal fourth quarter.

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Following the news release, shares of the company gained 2.4% in Friday’s trading session and closed at $19.98 in the extended trading session.

The buyout will allow Meridian Bioscience to supply BreathTek, a urea breath test for the detection of Helicobacter pylori across North America. Further, it is expected to give a strong footing to the company in the gastrointestinal diagnostic solutions space.

Notably, the purchase is expected to be earnings and cash flow accretive immediately and generate annual revenues to the tune of $20 million for the company.

The CEO of Meridian Bioscience, Jack Kenny, said, “This is another example of our strategic use of cash generated during the pandemic to further position the diagnostics segment for sustainable growth. We look forward to supporting Otsuka’s customers with the gastrointestinal expertise and world-class customer service Meridian is known for.” (See Meridian Bioscience stock chart on TipRanks)

The stock has a Moderate Buy consensus based on 1 Buy. Last month, H.C. Wainwright analyst Yi Chen recently reiterated a Buy rating on the stock with a price target of $30 (54.7% upside potential). Shares have declined 21.5% over the past year.