By Svea Herbst-Bayliss
NEW YORK (Reuters) -Prominent healthcare entrepreneur Ron Zwanziger approached medical device maker OraSure Technologies with a takeover offer, three people familiar with the matter said, in what would mark more consolidation in the heavily fragmented diagnostic industry.
In June, Zwanziger submitted an unsolicited all-cash proposal to buy the Bethlehem, Pennsylvania-headquartered company, known for its COVID-19 rapid antigen tests, the sources said.
Along with a prominent Wall Street investor and others — people the sources did not identify — Zwanziger proposed paying between $3.50 and $4.00 a share for OraSure. OraSure’s stock was trading aT $3.18 on Monday morning, leaving it with a market capitalization of $238.6 million.
The company’s board rejected the offer not long after it was sent, without any discussions between the parties, the three sources said.
A company representative did not immediately respond to a request for comment.
A representative for Zwanziger, a serial deal maker who cemented his reputation through at-home blood glucose testing, could not be reached for comment.
Zwanziger has built and sold a handful of diagnostic companies during his long career, and sold diagnostic test manufacturer Alere Abbott Laboratories in 2017 for around $5.3 billion.
The rebuffed offer for OraSure was his second effort to combine with the company, according to one of the sources. In 2022, only a few months after the company named Carrie Eglinton Manner as its chief executive officer, Zwanziger proposed a merger through a stock swap, but terms could not be reached, the source said.
OraSure appealed to Zwanziger because of its solid core technology and he thought he could turn around the company’s fortunes quickly with a new team, the sources said.
The company’s stock price has fallen 27% in the last 12 months and is off 77% over the last five years. Quarterly revenue has been dropping since early 2023 as COVID-19 era sales dried up.
OraSure has been attempting to diversify its business as a result, buying Sherlock Biosciences late last year for its molecular diagnostics platform.
Point of care diagnostic companies offer accurate results in real time to measure cholesterol, and detect flu and pregnancy, for example. But the industry still remains highly fragmented with companies such as Danaher, Siemens, Roche and Thermo Fisher Scientific capturing the biggest market share.
(Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama)
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