NEW YORK (TheStreet) -- Shares of Bio-Reference Laboratories (BRLI) were spiking, sharply up 33.01% to $43.84 on heavy volume in late morning trading Thursday, after the clinical testing laboratory agreed to be acquired by Opko Health (OPK) for about $1.47 billion.
As part of the all-stock deal, Bio-Reference shareholders will receive 2.75 shares of Opko for every share they own.
The two companies expect the deal to be completed during the second half of 2015.
Opko said it will use the marketing, sales and distribution resources of Bio-Reference Labs to push sales.
J.P. Morgan acted as the financial advisor to Opko, while Allen & Company LLC was the financial advisor to Bio-Reference Labs.
Shares of Opko Health were falling, down 8.26% to $17.54.
Miami-based Opko Health is a multi-national biopharmaceutical and diagnostics company, involved in developing a range of solutions to diagnose, treat and prevent various conditions.
About 3.76 million shares of Bio-Reference have exchanged hands as of 11:17 a.m. ET today, compared to its average trading volume of about 155,185 shares a day.
Elmwood Park, N.J.-based Bio-Reference Laboratories is a clinical testing laboratory, which offers testing, information and related services to physician offices, clinics, hospitals, employers and governmental units.
The company offers a range of laboratory testing services utilized by healthcare providers in the detection, diagnosis, evaluation, monitoring and treatment of diseases.
It is focused on esoteric testing, molecular diagnostics, anatomical pathology, genetics, women's health and correctional health care.
Separately, TheStreet Ratings team rates BIO REFERENCE LABS as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate BIO REFERENCE LABS (BRLI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BRLI's revenue growth has slightly outpaced the industry average of 13.2%. Since the same quarter one year prior, revenues rose by 15.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BRLI's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BRLI has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, BIO REFERENCE LABS's return on equity exceeds that of both the industry average and the S&P 500.
- 45.36% is the gross profit margin for BIO REFERENCE LABS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 3.17% is above that of the industry average.
- Net operating cash flow has significantly increased by 465.44% to $10.06 million when compared to the same quarter last year. In addition, BIO REFERENCE LABS has also vastly surpassed the industry average cash flow growth rate of 1.62%.
- You can view the full analysis from the report here: BRLI Ratings Report