Blackstone and TPG Acquire Hologic for $18.3 Billion Privatization

Private equity firms Blackstone and TPG are set to acquire Hologic for $18.3 billion, marking a significant event in the healthcare sector. This transaction stands as the largest medical devices deal since 2006, showcasing the market’s evolving dynamics.

Details of the Acquisition

The agreement entails the purchase of all outstanding shares of Hologic at a rate of $76 per share in cash. This offer provides nearly a 6% premium over Hologic’s last closing price. Shares of Hologic increased by 3% in response to the news, reflecting growing investor confidence. Notably, Hologic specializes in women’s health diagnostics, focusing on breast and cervical cancer screening.

Market Implications

This acquisition illustrates a broader trend where private equity firms are seizing opportunities in undervalued sectors like healthcare. While companies in artificial intelligence command high market valuations, healthcare and industrial sectors are seen as comparatively undervalued.

Financing the Deal

• The acquisition will involve debt financing from five major banks: Citigroup, Bank of America, Barclays, Royal Bank of Canada, and Sumitomo Mitsui Banking Corp.
• Decreasing borrowing costs over the past year have facilitated larger buyouts, allowing firms like Blackstone and TPG to finance substantial acquisitions.

Moreover, the deal is expected to close in the first half of 2026, pending regulatory approval. The consortium includes additional minority investments from the Abu Dhabi Investment Authority and GIC, a Singapore-based investment firm.

Future Prospects for Hologic

As Hologic transitions to private ownership, the emphasis will be on accelerating research and development. The company aims to pursue new acquisitions and develop products without the constraints of quarterly earnings reports.

Investors will also receive a non-tradable contingent value right of up to $3 per share if Hologic meets specific revenue targets in its Breast Health division during fiscal years 2026 and 2027. This could bring the total potential payout to $79 per share.

Expert Insights

Industry experts view this agreement as beneficial for the medical technology sector. Analysts suggest it will enhance the pool of acquirers and foster stronger businesses as they potentially re-enter the public market in the future.

Investment banking firm Goldman Sachs advised Hologic on this transaction, while Citigroup provided counsel to the consortium comprising Blackstone and TPG. Legal teams for Hologic and the buyers include prestigious firms such as Wachtell, Lipton, Rosen & Katz, and Kirkland & Ellis LLP.