Inverness Trying to Get Back in Wall Street's Good GracesInverness Trying to Get Back in Wall Street's Good Graces
Inverness Medical Innovations Inc. was a darling of Wall Street -- up until recently. The Massachusetts company was one of the most acquisitive firms in the device industry, snapping up firms whose offerings were easy to integrate with Inverness' portfolio of products. Then came a $900 million deal earlier this year for Matria Healthcare, a "disease management" firm. It did not fit the profile of a standard Inverness acquisition, and Wall Street could not figure out how it would fit in or what Inverness would be able to do with it.
June 6, 2008
So it punished Inverness' shares, which lost about half their value after the deal was announced. There was no good reason for the precipitous drop; the move had not even produced poor results or integration problems. It only happened because analysts and investors didn't understand the move.Now Inverness has come up with a plan to appease Wall Street, the Boston Globe reports. Inverness is in negotiations with a private equity firm to sell it half of Matria and two smaller disease management firms that Inverness bought. This way, Inverness would bolster its cash position and assume less risk in case the disease management play didn't work out. Since those discussions were revealed, Inverness' shares have risen 17%. They may not be undervalued for much longer.
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