Blackstone and TPG revive interest in buying Hologic, source says

Private equity firms Blackstone and TPG have revived discussions to acquire medical diagnostics company Hologic, potentially marking one of the year's largest healthcare take-private deals. The renewed interest, despite Hologic previously rejecting a $16 billion offer, is driven by the company's recent stock depreciation to $66 per share and a potential $40 million CEO payout upon a change of control. While Hologic has shown improving operational performance and raised guidance, due diligence is currently underway, with a deal not expected within the next month.

Analysis

Private equity firms Blackstone and TPG have renewed their acquisition interest in Hologic, signaling a potential large-scale take-private transaction in the healthcare diagnostics sector. The revived talks are significant as Hologic's current share price of $66, implying a market capitalization of roughly $14.7 billion, remains below the previously rejected non-binding proposal of $70-$72 per share. Key factors that may facilitate a deal include the stock's recent depreciation and a substantial change-of-control compensation package for the CEO valued at over $40 million. However, the situation remains speculative, with talks described as intermittent and a deal not expected within the next month as due diligence is still being conducted. Operationally, Hologic presents an improving fundamental picture; the company surpassed second-quarter expectations, raised its full-year earnings guidance, and reaffirmed its target for mid-single-digit revenue growth in fiscal 2026, driven by recovery in its molecular diagnostics and breast health segments.

Key Decisions for Investors

• Investors should consider the potential for share price appreciation in Hologic (HOLX) driven by the M&A premium, as any formal offer would likely exceed the current $66 trading price, possibly approaching the previously rejected $70-$72 range.
• It is crucial to monitor for any updates on the due diligence process, as the speculative nature of the talks means a failure to reach an agreement could cause the stock to fall back to a valuation based purely on its standalone fundamentals.
• Beyond the takeover possibility, Hologic's improving operational performance, including a raised earnings guidance and a solid long-term revenue growth outlook, provides a fundamental support level that may limit downside risk if a deal does not materialize.