NEW YORK May 21 An activist investor in Alere Inc wants the health diagnostics and services company to explore a sale of its drug testing business, which it believes could fetch as much as $2.5 billion and help Alere pay down debt, two people familiar with the matter said on Tuesday.
Alere, which has a $2.1 billion market value but has nearly $3.8 billion in long-term debt, has come under pressure from investment firm Coppersmith Capital Management, which disclosed a 5.8 percent stake earlier in May and urged the company to restructure its portfolio to boost shareholder value.
Coppersmith, founded by former partners of now-liquidated activist fund MMI Investments, has already said publicly that Alere should sell or close its struggling health management business, which it had built up through acquisitions worth $1.8 billion - with $1.4 billion of that amount already written off.
In addition, the investor told Alere privately that the company should also consider selling its toxicology business for drug abuse testing, a deal that could generate $2 billion to $2.5 billion in proceeds, the sources said. They asked not to be identified because the matter is not public.
Representatives for Coppersmith declined to comment, while Alere did not respond to requests for comment.