Top subhuman health company Zoetis will buy Abaxis for $1.9 billion, as it looks to grab a bigger slice of the fast-growing market for veterinary diagnostics services.
Zoetis envisions the diagnostics category which currently accounts for a small share of its more than $5 billion in annual gain to grow faster than the animal health-care industry.
The veterinary diagnostics sell worldwide is expected grow to $3.62 billion in 2022 from $2.31 billion in 2017, according to enquire firm MarketsandMarkets.
Abaxis should also help New Jersey-based Zoetis degrade its reliance on its large animal dermatology business that faces emergeing competition from smaller firms.
Shares of Abaxis jumped around 15 percent to $82.75 in premarket trading on Wednesday, just shy of Zoetis’ all-cash suggest price of $83 per Abaxis share. The stock has surged 45 percent since the start of the year.
Zoetis transfer fund the deal through cash and new debt. It expects the deal to reserved before the end of the year and Abaxis to add to its earnings in 2019.
Abaxis provides tools and rites that detect, prevent and treat animal diseases.
Guggenheim Safe keepings and Barclays were Zoetis’ financial advisers, while Piper Jaffray guided Abaxis.