Blackstone and TPG's $18.3bn Acquisition of Hologic
- amansp2006
- 4d
- 8 min read
By Arthus Marande, Christopher Putnis, Namien Koné, Mattia Colombo (ESCP); Freya ZHANG, Jacky CHAN, Sharon Liu, Akshi Bansal, Chak Li (HKUST).
Photo: Khanh Nguyen
Overview of the deal
Acquirer: Blackstone, TPG, and other minorities (ADIA, GIC)
Target: Hologic, Inc.
Implied Equity Value: $17.67bn
Total Transaction Size: $18.3bn (EV)
Closed date: Pending; expected H1 2026 (45-day go-shop in the agreement)
Target advisor: Citi (Financial); Kirkland & Ellis (Legal); Ropes & Gray (Regulatory)
Acquirer advisor: Goldman Sachs & Co. LLC (Financial); Wachtell, Lipton, Rosen & Katz (Legal)
On October 21, 2025, funds managed by Blackstone and TPG signed a definitive agreement to acquire Hologic, in a public-to-private transaction. Consideration is $76.00 in cash per share at closing plus a non-tradable CVR of up to $3.00 per share (two potential $1.50 payments tied to global Breast Health revenue in FY2026–FY2027), for up to $79.00 per share. The price represents a 46% premium to the May 23, 2025, unaffected close (the last full trading day prior to media reports). This control premium is consistent with Blackstone and TPG’s view that, as a category-leading diagnostics franchise, Hologic was undervalued by public markets and that growth could accelerate if medical utilization remains solid. The merger contract includes a 45-day go-shop permitting Hologic and its advisers to solicit and negotiate alternative proposals (with matching rights and period-dependent termination fees); closing is targeted for H1 2026, subject to customary shareholder and regulatory approvals. Upon completion, Hologic’s common stock will be delisted from Nasdaq. The deal is projected to be accretive by FY2027, with EPS of $4.96 (LSEG data).
The transaction is supported by fully underwritten bank commitments of $12.25bn from a five-bank group led by Citi and Bank of America, alongside Barclays, RBC and SMBC: a $9.5bn first-lien Term Loan B, a $2.0bn second-lien Term Loan B, and a $750m revolving credit facility. The loans are expected to be syndicated in the broadly syndicated loan (BSL) market; final economics (SOFR margin, OID, call protection, covenants) will be set at launch. Funds advised by Blackstone and TPG have provided the equity commitments, with ADIA and GIC participating as minority co-investors. The bank-led underwriting signals a clear shift from 2022–2023, when high interest rates and weak loan markets limited banks' ability to arrange and syndicate leveraged loans and many buyouts relied on private credit instead.
“Two years ago, Blackstone ‘could barely borrow any money’ when acquiring a $14bn division from Emerson, but a recent abundance of bank financing has helped dealmakers pursue ambitious transactions. The $18.3bn Hologic buyout would have been impossible in previous years due to a scarcity of financing.” - Jonathan Gray, COO of Blackstone
Company Details (Acquirer - Blackstone)
Blackstone is one of the world’s largest alternative asset managers, managing $1.24 trillion (as of 24/10/2025), investing across private equity, real estate, life sciences, credit, and infrastructure. The firm focuses on operational improvement and long-term value creation, employing a flexible capital model and global sourcing network. Its healthcare activity spans provider services, pharma royalties, devices, diagnostics, and biopharmaceutical development.
Founded in 1985, headquartered in New York, USA
CEO: Stephen A. Schwarzman
Number of employees: 4,895
Market Cap: $130.3bn (as of 02/10/2025)
EV: $188bn
LTM Revenue: $12.8bn
LTM EBITDA: $7.5bn
LTM EV/Revenue: 14.7x
LTM EV/EBITDA: 25.1x
Recent Transactions: $34bn acquisition of Medline Industries (June 2021), $6.1bn acquisition of TeamHealth (October 2016)
Company Details (Acquirer - TPG)
TPG is a global alternative asset manager that manages $269bn (June 30th 2025), known for value creation through operational transformation and thematic sector specialization. Its healthcare strategy focuses on provider networks, specialty care platforms, behavioral health, and tech-enabled care delivery. It also deploys capital in impact-oriented healthcare models through TPG Rise, emphasizing access and outcomes.
Founded in 1992, headquartered in San Francisco, USA
CEO: Jon Winkelried
Number of employees: 1,900
Market Cap: $20.8bn (as of 07/11/2025)
EV: $22.3bn
LTM Revenue: $4.3bn
LTM EBITDA: N/A
LTM EV/Revenue: 5.2x
LTM EV/EBITDA: N/A
Recent Transactions: $2.3bn acquisition of Surgical Care Affiliates (January 2017)
Company Details (Target - Hologic Inc.)
Hologic, Inc. is an American medical technology company primarily focused on improving women's health through innovative diagnostics, surgical solutions, and medical imaging products. It specializes in areas such as breast health (including mammography and biopsy systems), diagnostics for cervical cancer screening (e.g., HPV testing), and surgical technologies for minimally invasive procedures. The company operates globally, serving healthcare providers with a portfolio that emphasizes precision medicine and early disease detection, and it has been publicly traded on NASDAQ (HOLX) since 1990.
Founded in 1985, headquartered in Marlborough, Massachusetts/USA
CEO: Stephen P. MacMillan
Number of employees: ~7,000
Market Cap: $16.5bn (as of 21/10/2025)
EV: $16.8bn
LTM Revenue: $4.1bn
LTM EBITDA: $1.0bn
LTM EV/Revenue: 4.1x
LTM EV/EBITDA: 16.5x
Projections and Assumptions
Short-Term Consequences
The operation is already yielding notable short-term financial and market impacts. The announced buyout is already having visible short-term effects on Hologic’s share price, leverage, and investor confidence.
Hologic’s stock rose about 3% toward the $76 per-share cash offer upon announcement, reflecting a modest ~6% premium to its last close (up to $79 per share including contingent payouts) and optimism that the deal will close. The heavy debt financing behind the deal (roughly $11.5 bn in new loans, ~8.6× Hologic’s EBITDA) will sharply increase leverage, prompting S&P to place Hologic’s BBB credit rating (S&P Global) on CreditWatch Negative and highlighting higher interest costs. Nevertheless, leading banks have committed to fund the buyout, and the merger agreement includes a $900m reverse break fee if the buyers fail to close, further signalling the buyers seriousness and provides financial compensation to Hologic in case the deal collapses, which together reduce immediate financing risk. Investor reaction has been measured: analysts called the $79-per-share price “fair for all parties” and view the take-private as positive for the medtech sector, so Hologic’s stock remains just below the offer value as the deal moves toward closing.
Operationally, the first year under private ownership will focus on efficiency and core priorities. Blackstone and TPG are expected to cut costs and possibly divest non-core activities to strengthen profitability, while accelerating research and product development without quarterly market pressures. Renewed investment is likely in core women’s health areas, particularly the underperforming Breast Health segment. Daily operations and leadership should remain largely unchanged: Hologic will keep its Massachusetts headquarters and branding, and CEO Stephen MacMillan supports the buyout’s growth vision. Still, employees may face uncertainty as cost reductions raise concerns about restructuring such as layoffs, while regulators are expected to monitor any major changes to ensure that product quality and patient access remain unaffected.
Long-term Upsides
This acquisition signifies a pivotal shift for Hologic, which traditionally anchored in the U.S. market with approximately 75% of revenue derived domestically and just 25% internationally. The acquirers are targeting a business with a fundamentally resilient model. The stable, recurring revenue stream from essential women's health screenings provides predictable and strong cash flow. This is critical for the acquisition's financial structure, as it directly supports debt repayment and fuels value creation in a leveraged buyout (LBO), primarily through deleveraging and operational improvements, thereby leveraging the investment's internal rate of return (IRR). With Blackstone and TPG having a long-established focus on healthcare innovation, the deal effectively integrates premium women's health assets into their portfolios.
Following a period of post-COVID normalization where diagnostic revenues retreated from their FY2021 peak, Hologic has faced stagnant growth in its core Diagnostics and Breast Health segments. This contrasts with steady advances in complementary areas such as GYN Surgical and Skeletal Health, revealing a portfolio in transition. Post-acquisition, Hologic can harness Blackstone's and TPG's global resources for international expansion. This includes penetrating high-potential markets in Asia-Pacific and Europe through strategic partnerships, localized distribution channels, supply chain enhancements, and regulatory navigation. This concerted effort will be crucial for diversifying its revenue base and reducing its dependence on the U.S. market.
The transition to private ownership is a strategic boon for Hologic's innovation trajectory. While operating in a sector defined by rapid technological change, Hologic's R&D spending was historically around 5-8% of revenue. As the company stated, it operated in a disciplined, efficient model focused on incremental advances, enhancement of existing platforms and the development of adjacent technologies, rather than riskier, blue-sky research. Liberated from the short-term pressures of public markets, Hologic gains the strategic flexibility to potentially reallocate capital towards more ambitious, long-term R&D initiatives. This could include channeling resources into next-generation technologies like AI-powered diagnostics, thereby accelerating its ability to identify and develop new products and secure its leadership in a competitive landscape without the constraint of earnings expectations. The recently released Q4 Financial Reports results, which show gains across all segments, underscore the potential for this acquisition-driven acceleration.
Risks and Uncertainties
The acquisition of Hologic by Blackstone and TPG involves several material risks and uncertainties. Central to these is the deal’s layered payment structure, which combines a $76 per share cash offer with a Contingent Value Right (CVR) of up to $3 per share. This design aligns stakeholder incentives and helps reconcile valuation gaps, while also reflecting the buyers’ need to manage pricing and leverage constraints in a tightening credit environment. If the CVR is not triggered, it would suggest weaker-than-expected fundamentals, undermining long-term value despite a lower initial cash outlay. Given Hologic’s stable cash flow profile as a medical technology firm, retaining margins and integrating efficiently cost reducing measures without hurting the top line is critical.
Additionally, the deal still requires approval from stockholders and regulatory authorities. Given Hologic’s involvement in diagnostic and breast health technologies, the transaction is likely to face heightened review over data privacy, patient safety, and product compliance. Any delay or modification in regulatory approval could extend the closing timeline and weaken investor confidence in the integration. Moreover, the deal includes a go-shop clause, allowing Hologic to seek alternative offers after signing. While the current valuation makes a higher bid unlikely, the possibility of a competing offer, similar to the recent bidding war between Novo Nordisk and Pfizer over the startup Metsera, adds a layer of uncertainty. Even a marginally better proposal could complicate the transaction and shift expectations around timing and value realization.
The acquisition is also exposed to broader macroeconomic and healthcare spending cycles. Although Hologic’s diagnostic and imaging products are relatively resilient, fluctuations in hospital budgets and healthcare investments during economic slowdowns could slow equipment upgrades or reduce demand for consumables, thereby affecting revenue realization post-acquisition. Furthermore, potential changes in healthcare policy or government funding priorities may alter market dynamics and impact the expected pace of growth. These external factors introduce additional uncertainty for the acquirers, potentially adding further acquisition cost and weakening short-term return projections. Ultimately, the deal’s success will hinge on the acquirers’ ability to translate Hologic’s stable earnings base into sustainable value creation, while effectively managing insolvency and regulatory risks.
“With their resources, expertise and commitment to women’s health, Blackstone and TPG will help accelerate our growth and enhance our ability to deliver critical medical technologies to customers and their patients around the world. This transaction delivers immediate and compelling value to Hologic stockholders, reflecting the dedication of our employees whose hard work has made this milestone possible.” - Stephen P. MacMillan, Hologic’s Chairman, President and Chief Executive Officer