DEFA14A: Hologic Acquired by Blackstone, TPG for Up to $79/Share

Hologic, a global leader in women's health, has agreed to be acquired by funds managed by Blackstone and TPG for up to $79 per share, including a contingent value right.

Summary

• Hologic, Inc. will be acquired by affiliates of Blackstone Inc. and TPG Capital for up to $79.00 per share.
• The consideration includes $76.00 per share in cash and one non-tradeable Contingent Value Right (CVR) worth up to $3.00 per share.
• CVR payments are contingent on Hologic's Breast Health business achieving specific global revenue milestones in fiscal years 2026 and 2027.
• The transaction values Hologic at up to $18.3 billion enterprise value, based on 228 million diluted shares outstanding, $2.2 billion of cash and short-term investments, and $2.5 billion of Hologic debt as of September 27, 2025.
• Hologic's Board of Directors unanimously approved the merger agreement and recommends stockholder approval.
• The deal includes significant minority investments from a wholly owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and an affiliate of GIC.
• Hologic's common stock will be delisted from Nasdaq and deregistered under the Securities Exchange Act of 1934 upon completion of the merger.
• The merger agreement includes a 45-day 'go-shop' period, allowing Hologic to solicit alternative acquisition proposals until December 5, 2025.
• The transaction is expected to close in the first half of calendar year 2026.

Sentiment

Score: 8

Explanation: The sentiment is highly positive due to the substantial premium offered to shareholders, the unanimous board approval, and the inclusion of CVRs for potential additional upside. The committed financing and lack of a financing condition also contribute to a strong positive outlook for deal completion, despite inherent risks in any merger and CVRs.

Positives

• Provides immediate and compelling value to Hologic stockholders with a 46% premium over the May 23, 2025 closing price, the last full trading day prior to media reports regarding a possible transaction.
• Includes a potential additional $3.00 per share through CVRs, offering upside tied to future Breast Health business performance.
• Secured committed financing from Blackstone, TPG, Citi, Bank of America, Barclays, Royal Bank of Canada, and SMBC, ensuring sufficient funds for the purchase price and related expenses.
• The transaction is not subject to a financing condition, increasing certainty of closing.
• Hologic will maintain its headquarters in Marlborough, Massachusetts, and continue operating under its brand.
• Cash retention awards were granted to key executives to ensure continuity and stability during the transition.

Negatives

• CVRs are non-tradeable and their value is contingent on future revenue milestones, introducing uncertainty and illiquidity for a portion of the consideration.
• The company will be delisted from Nasdaq, removing public market liquidity for shareholders.
• There is no assurance that any of the CVR milestones will be achieved, potentially resulting in less-than-anticipated payments.
• The transaction may cause disruption of management time from ongoing business operations.
• There is a risk of unexpected costs or expenses resulting from the proposed transaction.
• The transaction carries the risk of litigation.
• The announcement could have an adverse effect on Hologic's ability to retain and hire key personnel and to maintain relationships with customers, vendors, partners, employees, and other business relationships.

Risks

• The timing, receipt, and terms and conditions of any required governmental and regulatory approvals (including HSR, Antitrust Laws, and CFIUS) could delay the consummation of the proposed transaction or cause the parties to abandon it.
• The occurrence of any event, change, or other circumstances could give rise to the termination of the merger agreement.
• There is a possibility that Hologic stockholders may not approve the proposed transaction.
• The parties to the merger agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all.
• Risks related to disruption of management time from ongoing business operations due to the proposed transaction.
• Any announcements relating to the proposed transaction could have adverse effects on the market price of Hologic's common stock.
• The risk of any unexpected costs or expenses resulting from the proposed transaction.
• The risk of any litigation relating to the proposed transaction.
• The proposed transaction and its announcement could have an adverse effect on the ability of Hologic to retain and hire key personnel and to maintain relationships with customers, vendors, partners, employees, stockholders, and other business relationships and on its operating results and business generally.
• The risk that the holders of the CVRs will receive less-than-anticipated payments with respect to the CVRs after the closing of the proposed transaction.

Future Outlook

Hologic will not provide financial guidance for fiscal year 2026 due to the pending transaction. The company expects to file its Form 10-K for fiscal 2025 in late November. The merger is anticipated to close in the first half of calendar year 2026, subject to customary approvals. The future performance of the Breast Health business will determine the payout of the contingent value rights.

Management Comments

• Stephen P. MacMillan, Hologic's Chairman, President and Chief Executive Officer, stated that the transaction marks an exciting new chapter, delivering immediate and compelling value to stockholders and reflecting employee dedication. He believes Blackstone and TPG's resources and expertise will accelerate growth and enhance Hologic's ability to deliver critical medical technologies.
• Ram Jagannath, a Senior Managing Director at Blackstone, commented that Hologic is an outstanding global leader in women's health with a longstanding reputation for groundbreaking products. He expressed excitement to partner with Hologic's talented employees to further invest in product innovation and growth.
• John Schilling, M.D., Co-Managing Partner of TPG Capital, noted that Hologic's innovation-driven products are improving health outcomes for women. He highlighted TPG's focus on healthcare innovation and the opportunity to support next-generation solutions, expressing pride in partnering with Hologic and Blackstone.

Industry Context

This acquisition highlights the continued interest of private equity firms, such as Blackstone and TPG, in the healthcare sector, particularly in established leaders like Hologic with strong positions in specialized areas like women's health and medical diagnostics. The inclusion of contingent value rights (CVRs) reflects a common strategy in private equity deals to bridge valuation gaps and incentivize future performance, especially in sectors with evolving market dynamics or product pipelines. The significant minority investments from sovereign wealth funds (ADIA and GIC) underscore the attractiveness of stable, cash-generating healthcare assets to large institutional investors seeking long-term value.

Comparison to Industry Standards

• The 46% premium offered to Hologic's shareholders is a substantial premium, generally exceeding typical premiums in public-to-private transactions, indicating strong buyer conviction or competitive bidding.
• The use of CVRs is a common mechanism in pharmaceutical and medical device acquisitions to share future revenue upside or mitigate risk, aligning buyer and seller interests post-acquisition.
• The involvement of major private equity firms like Blackstone and TPG, alongside sovereign wealth funds like ADIA and GIC, is consistent with large-scale, complex healthcare buyouts, demonstrating the significant capital required and the strategic importance of the target company.
• The committed financing structure, explicitly stating no financing condition, provides a higher degree of deal certainty compared to transactions with financing contingencies, which is a positive for Hologic's shareholders.

Management Changes

Corporate Governance

Legal Proceedings

• The filing acknowledges the risk of litigation relating to the proposed transaction and includes covenants for Hologic to promptly notify Parent of any stockholder litigation or action and allow Parent to participate in the defense and/or settlement of such matters.

Related Party Transactions

• The filing states that there have not been any contracts or transactions or series of related contracts or transactions, nor are there any currently proposed, that would be required to be disclosed under Item 404 of Regulation S-K of the Exchange Act that have not been disclosed in the Company Reports filed as of the date of the agreement.

Stakeholder Impact

• **Shareholders**: Will receive a significant cash premium and potential additional cash through non-tradeable CVRs, but will lose public market liquidity as the company will be delisted.
• **Employees**: Certain executives received cash retention awards. Generally, employees are expected to continue employment with comparable base salary, bonus opportunities, and benefits for at least one year post-closing.
• **Customers, Vendors, Partners**: Management aims to preserve business organizations intact and maintain existing significant business relationships, but there is a risk of adverse effects on these relationships due to the transaction announcement.
• **Creditors**: Existing debt (Senior Notes) may be subject to tender offers or redemption, and new debt financing will be put in place by the acquirers.

Next Steps

• Hologic will prepare and file a preliminary proxy statement with the SEC as promptly as practicable, and in no event later than December 5, 2025.
• Hologic will use reasonable best efforts to have the proxy statement cleared by the SEC and respond to any comments.
• Hologic will mail a definitive proxy statement to its stockholders as promptly as possible after SEC clearance.
• Hologic will convene a stockholder meeting to consider and vote upon the approval of the merger agreement.
• The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 must expire or be terminated.
• Other required governmental approvals under specified antitrust and foreign direct investment laws must be obtained or waiting periods must lapse.
• The CFIUS waiting period must expire or be terminated.
• Parent will negotiate and enter into definitive agreements with respect to the debt financing.
• Hologic plans to report its financial results for the fourth quarter of fiscal 2025 via press release on November 3, 2025.
• Hologic plans to file its Form 10-K for fiscal 2025 with the SEC in late November.
• The transaction is expected to close in the first half of calendar year 2026.
• Upon completion, Hologic's common stock will be delisted from the Nasdaq Stock Market LLC and deregistered under the Securities Exchange Act of 1934.

Key Dates

Recommendation

The acquisition offers a substantial 46% premium over the pre-announcement trading price, providing immediate and compelling value to shareholders. The inclusion of CVRs offers additional upside potential, albeit contingent, tied to the core Breast Health business performance. The unanimous board approval and fully committed, non-contingent financing significantly de-risk the transaction for shareholders, making it highly attractive for investors seeking a near-term, high-certainty return.

Keywords

Hologic, Blackstone, TPG Capital, Merger, Acquisition, Contingent Value Right, CVR, Breast Health, Healthcare, Medical Devices, Private Equity, Delisting, Stockholder Approval, Regulatory Approval, HOLX