Medical devices firm CooperCompanies, Inc. (COO) has signed an agreement to acquire Los Angeles-based life sciences firm Generate Life Sciences for approximately $1.6 billion. Cooper’s shares dipped nearly 1% in the extended trading session on Wednesday to close at $430.
Headquartered in California, the company produces contact lenses, medical devices and fertility and genomic products for women’s healthcare.
Deal Details
The acquisition is expected to close in Cooper’s fiscal first-quarter ending in January 2022, subject to customary closing conditions.
Furthermore, in the first year after the completion of the acquisition, the company expects the deal to add $0.30 per share to its adjusted earnings.
CEO Comments
The President and CEO of Cooper, Al White, said, “This acquisition is a strong strategic fit for CooperSurgical as it allows us to better serve fertility clinics and Ob/Gyns with a more extensive suite of products and services.”
“As a leader in women’s healthcare, this is an important addition to our existing offerings and allows us to leverage our infrastructure and expertise, including our sales forces’ strong clinical reputation and educational capabilities.”
About Generate Life Sciences
Generate Life Sciences provides reproductive, newborn stem cell, genetic screening, medical device, and healthcare technology services.
As of September 30, it reported revenues of around $250 million in the trailing twelve-month period. (See Insiders’ Hot Stocks on TipRanks)
Wall Street’s Take
Last month, KeyBanc analyst Matthew Mishan reiterated a Buy rating on Cooper but lowered the price target from $476 to $465 (7.1% upside potential) due to incremental foreign exchange headwinds.
Analyst Recommendation
Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 2 Holds. The average CooperCompanies price target of $473 implies nearly 9% upside potential. Shares have gained 26.5% over the past year.
Risk Analysis
According to TipRanks’ Risk Factors tool, Cooper is at risk mainly from one factor: Legal & Regulatory, which accounts for 36% of the total 39 risks identified for the stock. Under the Legal & Regulatory risk category, the company has 14 risks, details of which can be found on the TipRanks website.
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