Coppersmith Presentation to Alere Inc Stockholders
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Health Management: Capital Allocation
▪ The results of Alere's capital allocation in the Health Management division are even worse:
> 18 acquisitions totaling over $1.8B, $1.5B in goodwill (written down 92% to $125mm)
> 13 acquisitions since organic revenue growth turned negative, 6 acquisitions since the write-downs began
> $198mm in capital expenditures so far; $30mm+ in OpEx development of Apollo alone
▪ 3.4x revenue multiple in reported HM deals
High of 3.9x, low of 2.6x
First 3 acquisitions: 3 months, 3 deals,
3.7x revenue, $1.7B spent
Healthways is HM's only public pureplay
comparable
> 1.0x 5 year average revenue multiple²¹
▪ Alere's 2012 HM impairment test used a
multiple of 0.9x revenue ¹6
I
▪ Alere currently trades at 2.1x consensus
forward revenue
> Alere's diagnostic peers currently trade at
3.7x consensus forward revenue
Health Managment Goodwill
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
2007
2008
2009
2010
2010
COPPERSMITH
Acquisitions ■Impairments
2011
2011
2012View entire presentation