TA Associates did a nice summer's work with Reno-based Alere Medical Inc., turning a $175 million investment into $302 million in less than year.
Inverness Medical Innovations of Waltham, Mass., said last week it signed a deal to acquire Alere for $125 million in cash and $177 million in Inverness common stock, which trades on the American Stock Exchange.
That price allows a partnership that includes TA Associates, a Boston-based private equity firm and members of the Alere management team to turn a $127 million profit. It paid $175 million in cash in early spring to purchase Alere from early investors in the company.
Also profiting are early investors in the company, notable Nevada Ventures LLC, a Reno venture capital firm. Robb Smith, managing partner of the firm, called the Inverness transaction "a good outcome for us."
He said the fund hasn't decided what it will do with the Inverness stock, trading at $58 a share, that it got in the deal.
The latest deal values Alere Medical at about four times its projected revenues of $77 million this year.
Alere provides disease-management services to chronically ill patients. Nurses at centralized facilities remotely monitor patients' conditions and educate them.
The company operates disease-management programs for heart failure, coronary artery disease, diabetes, asthma and chronic obstructive pulmonary disease.
It employs about 200 people in Reno, and also operates centers at Denver, San Antonio and Columbus, Ohio. Its total employment stands at 350.
The acquisition marks the first foray into the disease-management industry by Inverness. The company, which posted about $22 million in sales during 2006, develops and sells medical diagnostic products worldwide.
The Alere acquisition is the third announced by Inverness during October alone. It's been busy throughout the year buying other companies in the medical industry.
Ron Zwanziger, chief executive officer of Inverness, said the company believes that Alere's skills at disease-management will complement cardiac diagnostic technologies under development by two other subsidiaries of Inverness.
He said the company also was drawn to Alere by the Reno company's "exceptional management, solid business platform and strong revenues and profitability."
Ron Geraty, the chief executive officer of Alere, said he believes the transaction will give Alere a leg up as it can draw on the technological and medical diagnostic skills of Inverness.
The acquisition is expected to close before the end of this year, Inverness executives said.
