Coppersmith Presentation to Alere Inc Stockholders
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Matria is a Case Study in Alere M&A: Shoot First, Ask Questions Later
SCOPPERSMITH
In 2007, Coppersmith's executives contemplated an investment in Matria's common stock
▪ Performed extensive analysis on Matria and the health management industry; chose not to pursue Matria because of
strategic problems uncovered in due diligence:
> In 2007 Matria had already begun to lose several major contracts which would lead to organic revenue declines in 2008
> The industry generally, and Matria specifically, were largely unable to demonstrate an ROI for customers
> Matria sold direct to employers, putting it in direct competition with payors/insurers who could aggressively insource
Healthways instead operated outsourced health management for insurers to offer their customers
"It [health management] was, obviously as you know, in freefall because of some insourcing by some of the larger
accounts." - Chairman & CEO Zwanziger, 4th quarter of 2011 earnings conference call
▪ We were not the only ones to see these risks:
"There Just have not been any vlable economic models to date that would Justify such an acquisition financially." - John Spina,
VP and Treasurer of Walgreen Company (NYSE: WAG), a participant in the Matria sale process, DealReporter, 4/23/08
Alere announced the acquisition of Matria in 1/28/08 for $1.2B, its third major HM acquisition in three months
▪ On the day of the announcement Alere was down 8% and Matria was flat (27% below the deal price) - market knew
immediately what Chairman & CEO Zwanzig still appears not to know about diagnostics and health management
>
CHAIRMAN & CEO ZWANZIGER HAS PUBLICLY ACKNOWLEDGED THAT ALERE DID NOT
PERFORM SUFFICIENT DUE DILIGENCE ON MATRIAView entire presentation