Takeout offer validates Hologic at attractive valuation, says Raymond James

Raymond James notes that according to the Financial Times, TPG (TPG) and Blackstone (BX) made an offer to acquire Hologic (HOLX) for $16.3B-$16.7B, or $70-$72 per share, that was rebuffed by the company. That said, the article notes that “there is still a chance deal talks could be revived.” While the firm wouldn’t say this was necessarily expected, Raymond James isn’t shocked to hear private equity taking an interest in Hologic at these levels given present headwinds are more temporary but still pushed the stock into the low $50s, which is well shy of the 16.5-times five-year average. The firm continues to see a business generating strong free cash flow, mid-single-digit normalized revenue growth capabilities, and with capital development, double-digits EPS growth, all of which in its view supports a multiple in the mid-teens or higher, at least equivalent to the reported deal range that the board has seemingly turned down. Raymond James has an Outperform rating on Hologic’s shares.