Exact Sciences (EXAS) will likely need to see over $100 a share in a takeover, according to a William Blair analyst, after an earlier report that Abbott Labs (ABT) is talks to buy the cancer test maker.
Shares of Exact Sciences (EXAS) soared 21% to ~$84/share after Bloomberg reported the takeover discussions with a transaction possible within the coming days. Abbott Labs fell 3.6%.
“From a valuation perspective, we believe a takeout multiple between 6 and 7 times forward sales would be required,” William Blair analyst Andrew Brackmann wrote in a note on Wednesday. “This would be a 35%-plus premium to the current multiple of just under 5 times, a roughly 20% premium to the five-year average of roughly 5.6 times, and in line with smaller but similarly growing profitable labs that trade in this range.”
Exact Sciences (EXAS) is known for its Cologuard colon cancer test.
“Overall, with limited details, EXAS would offer a solid brand and strong beachhead into the broader oncology testing market across screening,” Barclays analyst Luke Sergott wrote in a note on Wednesday.