Hologic has signed an agreement to acquire Focal Therapeutics for about $125 million in cash to boost its breast health offerings. The deal comes hot on the heels of the Marlborough, MA-based company announcing it would acquire Faxitron Bioptics, another breast health specialist, for $85 million. Hologic said the Focal acquisition is set to close in early October.
With Focal, Hologic will have access to BioZorb, an implantable 3-D marker that helps clinicians overcome challenges in breast conserving surgery, or lumpectomy. The marker, placed by the surgeon, is used to mark the tumor excision site for monitoring and future treatments, and its unique open design allows for tissue in-growth during the healing process.
Aliso Viejo, CA-based Focal Therapeutics generated about $16 million of revenue in the last 12 months. The acquisition, which is expected to close in early October, is estimated to be neutral to Hologic’s non-GAAP earnings per share in fiscal 2019, and accretive thereafter.
“Acquiring Focal Therapeutics strengthens our position in an attractive, adjacent breast health market, and is consistent with our capital deployment goals,” Steve MacMillan, Hologic’s chairman, president and CEO said in a release. “The transaction is accretive to our revenue growth rate and gross margin, broadens our recurring revenue base, and provides attractive return on invested capital.”
Focal and Faxitron are acquisitions that could help significantly bolster Hologic in a way Cynosure initially couldn’t. Hologic admitted it stumbled a bit with Cynosure, earlier this year.
Recently, Hologic updated investors on the anticipated financial impact of its decision to suspend the Vitalia products, which are sold through the Cynosure unit. The company disclosed on an SEC filing that the TempSure Vitalia system suspension could impact fourth-quarter Cynosure revenue by $15 million due to refunds.
Hologic picked up Cynosure, an aesthetics specialist, for about $1.65 billion in 2017.