Idexx Laboratories Inc. shares climbed the most in more than five years over speculation the veterinary diagnostic company could be a takeover target.
Idexx rose 10 percent to $70.36, the highest closing price since April 2010. Before Wednesday’s gains, the shares were down 1.5 percent during the last 12 months.
The company could be among targets that Zoetis Inc., a maker of drugs for pets and livestock, is looking at, said Mark Massaro, an analyst with Canaccord Genuity Group Inc. On Tuesday, Zoetis made a regulatory filing outlining how it could raise capital through new debt or equity, which Massaro said could have prompted deal speculation among investors.
Last month, during an investor conference, Zoetis Chief Executive Officer Juan Ramon Alaix identified diagnostics as one of the company’s four growth areas.
Idexx’s companion animal diagnostics unit is its biggest business, with $1.24 billion in 2014 sales. The company also sells testing products for livestock. Revenue at the company has more than doubled since 2006.
There’s not unanimous agreement about whether Zoetis would pursue a deal with a company like Idexx. “We do NOT believe the company is interested in adding diagnostic instruments or a reference lab, which is something that has been garnering attention by investors,” Kevin Ellich, an analyst at Piper Jaffray Cos., said in a July 13 note. He declined to speak on the record Wednesday.
Idexx, based in Westbrook, Maine, has a market value of $6.59 billion, compared with Zoetis’ $25 billion.
Zoetis might also look two other animal health diagnostics companies, Massaro said, Abaxis Inc., which has a market value of $1.29 billion, or the much-smaller Heska Corp., which is worth $196 million.
Abaxis shares rose 1.5 percent to $56.75. Heska fell less than 1 percent to $30.10.