Test maker deal preps for life after Covid-19

NEW YORK, Dec 23 (Reuters Breakingviews) - The pandemic has been good for U.S. diagnostic-test provider Quidel (QDEL.O). Third-quarter revenue was quadruple the figure for the same period two years ago. But 2023 revenue at $732 million, according to estimates compiled by Refinitiv, would only be about half the top line in 2021. So like other diagnostics firms, it has turned to M&A: it's buying Ortho Clinical Diagnostics (OCDX.O)for $6 billion.

The purchase will help Quidel expand overseas. And unlike the buyer's, Ortho’s revenue is expected to grow by 2023. But it's a big bite for Quidel, itself worth less than $7 billion at Wednesday's closing stock price. That may help explain why investors sent the stock down more than 15% after the deal was unveiled on Thursday.

It's also a windfall for private equity firm Carlyle (CG.O). The buyout group bought Ortho from Johnson & Johnson (JNJ.N) for about $4 billion in 2014. The company went public earlier this year and Carlyle still owns about half its shares. The 25% acquisition premium is a handy boost. (By Robert Cyran)

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