Chembio Diagnostics acquired by Biosynex SA: fairness opinion by Craig-Hallum
Deal terms
Implied value per share by method vs. $0.45 offer
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of Craig-Hallum to the target board
Discounted cash flow assumptions
Unlevered free cash flows discounted to present value as of January 1, 2023 using a 30.0% assumed tax rate; 25th/75th percentile terminal values of approximately $11 million and $22 million; per-share range represents 25th to 75th percentiles.
Selected public companies (6)
Biosynex SA · Co-Diagnostics, Inc. · Lucira Health, Inc. · Lumos Diagnostics Holdings Limited · OraSure Technologies, Inc. · Trinity Biotech plc
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / LTM Revenue | 0.0x | 0.2x | 1.3x | 0.2x–0.9x | $0.29–$1.12 |
| EV / 2023E Revenue | 0.0x | 0.8x | 1.2x | 0.4x–1.2x | $0.30–$1.00 |
| EV / LTM Gross Profit | 0.3x | 1.4x | 4.3x | 0.5x–2.8x | $0.12–$0.74 |
Selected precedent transactions (5)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2023-01-31 | Theradiag SA | Biosynex SA | — |
| 2022-08-03 | Curiosity Diagnostics Sp. z o.o. | Bio-Rad Laboratories, Inc. | — |
| 2020-07-22 | UrSure, Inc. | OraSure Technologies, Inc. | — |
| 2020-04-30 | Exalenz Bioscience Ltd. | Meridian Bioscience, Inc. | — |
| 2019-09-04 | Curetis AG | OpGen, Inc. | — |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / LTM Revenue | 2.3x | 3.0x | 3.7x | 2.6x–3.4x | $3.40–$4.36 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Premiums Paid Analysis | Reviewed 129 healthcare M&A transactions announced since January 1, 2018 involving U.S.-based public targets with equity values between $10 million and $1 billion. Observed 1-day premiums of -31% min / 27% 25th pct / 49% median / 84% 75th pct / 660% max, and 1-month premiums of -35% / 30% / 62% / 105% / 475%. Offer Price premiums were 29% (1-day) and 114% (1-month). Implied per share: 1-day $0.23-$2.55 (25th-75th $0.43-$0.62); 1-month $0.13-$1.16 (25th-75th $0.26-$0.41). | $0.26–$0.62 |
Engagement letter dated January 5, 2023: $250,000 payable upon delivery of the opinion; $1.0 million payable upon consummation of the Offer and Merger; plus $30,000 expense reimbursement. Craig-Hallum received $1,653,083 from the Company for investment banking services in the past two years.
Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | CAGR |
|---|---|---|---|---|---|
| Revenue | $37.7M | $54.6M | $59.7M | $72.5M | 24.4% |
| Revenue growth | 20.1% | 44.8% | 9.3% | 21.4% | |
| EBITDA | $-2.9M | $6.0M | $10.8M | $20.1M | — |
| EBITDA growth | — | — | 80.0% | 86.1% | |
| EBITDA margin | -8% | 11% | 18% | 28% | |
| Implied EV / EBITDA | — | 2.9x | 1.6x | 0.9x |
Year-1 growth is against LTM at announcement ($31.4M revenue, $-7.5M EBITDA); later years are year over year.
Company management prepared projections for fiscal years 2023 through 2027 in connection with the 2022 strategic planning process, which were provided to the Company Board, Craig-Hallum and Parent. Total revenues were projected to grow from $31.4 million in 2023 (a 37% decline) to $72.5 million in 2027, with gross margin improving from 41% to 57%. Adjusted EBITDA was projected at $(7.5) million in 2023 improving to $20.1 million in 2027, and unlevered free cash flow (calculated by Craig-Hallum at a 30% tax rate) from $(9) million in 2023 to $13 million in 2027.
Process notes
Other Diagnostics / Life Sciences fairness opinions
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- Abcam / Danaher 2023 · 29.1x EV/EBITDA
- Meridian Bioscience / SD Biosensor / SJL Partners 2022 · 17.6x EV/EBITDA
- Exact Sciences / Abbott 2025 · 44.2x EV/EBITDA
- Enzo Biochem / Battery Ventures 2025
- Akoya Biosciences / Quanterix 2025
All Diagnostics / Life Sciences opinions → · Craig-Hallum opinions