* Company seeking to streamling operations
* Follows years of unprofitable acquisitions
* Discussions in late stages
Discussions about a potential divestiture are in late stages and a deal could come as soon as in the next several weeks, some of these people said, asking not to be named because the matter is not public.
The health or disease management unit, now grouped under what it calls the Health Information Solutions segment, is comprised mostly of Matria Healthcare, which Alere bought for $900 million in 2008 in a deal criticized for expanding the company into disparate areas.
The unit provides programs and services for managing diseases and high-risk pregnancies, with a focus on women’s and children’s health, and posted roughly $200 million in first-half revenue.
A deal would come at a time when Alere faces an unsolicited approach from its former chief executive Ron Zwanziger, who said last month he wanted to take the $3.2 billion company private.
Zwanziger said in a regulatory filing he had been discussing the prospect of making the offer with other shareholders over the past two months, and requested one month of due diligence in an effort to secure financing.
The Waltham, Massachusetts-based company has rejected that request saying the proposal does not identify the sources of any proposed financing.
Alere, which makes a range of diagnostic tools such as home pregnancy tests and fertility monitoring kits, in August said it would look to sell health management businesses, responding to investor pressure to sell off non-core assets. A representative for Alere declined to elaborate.
People familiar with the situation say it will be a long shot for the Zwanziger-led group to secure private equity backing for any buyout proposal, particularly because he was forced to leave after years of underperformance.
However, post the divestiture of the disease management unit, Alere could be an attractive takeover target for larger diagnostics companies such as Danaher Corp and Abbott Laboratories, these people said.
In July, Zwanziger and two other senior executives quit the company and the board initiated a search for a new chief executive. Chief Operating Officer Namal Nawana is serving as interim CEO.
Soyoung Kim is an editor for sister news service Reuters. Greg Roumeliotis of Reuters also contributed to this piece.