Coppersmith Presentation to Alere Inc Stockholders
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Coppersmith's Leverage Plan: Streamline for Proceeds & Performance
Alere has the opportunity to massively de-lever in the very near-term, potentially being debt-free in less than a year
▪ Alere has up to $3.4B in potential divestitures that are fallow or non-synergistic, and would have minimal impact on the
core business, we believe
COPPERSMITH
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Large-scale divestitures would also streamline an unwieldy business portfolio, potentially driving better performance
through greater focus, including:
1. The aforementioned Health Management division
The consumer products joint venture with Proctor & Gamble (P&G JV)
3. And potentially the Toxicology division
▪ We believe the P&G JV, which management cites as a successful divestiture, essentially created a fallow asset with no
synergies that investors largely ignore in valuing the Company:
2.
> Alere's share of the P&G JV's net earnings appears below the line and therefore out of sight for most investors' and
research analysts' valuation calculations, particularly as its gross and operating margins are not disclosed
> The P&G JV has barely grown since its formation in 2007
The U.S. launch of a conception timing product may spur growth but still not accrue to Alere's stock
> We estimate the value of the P&G JV to be between $240mm and $325mm
Comparable revenue multiples of consumer product companies27
> The price Proctor & Gamble paid for its 50% share of the P&G JV at inception ($325mm)View entire presentation