Yiwen Lu

Shubham Saharan

Sunny Oh

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Blackstone’s outreach to Hologic CEO Stephen MacMillan last year was not done on a whim.

Since its founding in 1985 and subsequent IPO in 1990, Hologic has established its footprint in mammography and molecular diagnostic testing for women’s health, a field with high barriers to entry.

The Covid pandemic was also a massive financial catalyst for the company. In early 2020, Hologic developed multiple Covid-19 assays and won emergency use authorization for its Aptima SARS-CoV-2 test. In Q1 2021, the company’s diagnostic sales grew to $1.1bn from $312m in the year prior.

But post-Covid, the company grappled with the macro headwinds hitting healthcare companies. By 2024 and 2025, Hologic’s Covid-related revenue had significantly declined over the course of multiple quarters. Despite growth in its core molecular diagnostics portfolio, its total revenue decline did not go unnoticed by Wall Street.

Around the same time, Hologic was severely hit by the global chip shortage, which specifically impacted its breast health segment. That resulted in Hologic cutting its annual revenue forecast twice last year. Then in May 2025, it lowered the annual profit forecast, citing tariffs and geopolitical conditions.

Blackstone’s proposal to MacMillan offered a strategic sanctuary from public market scrutiny. By transitioning to private ownership, Hologic could “get out of the noise, the quarterly gyrations” and focus on accelerating investments in product development, according to a person familiar with the discussions.

The proposal resonated with both MacMillan and the Hologic board — and what followed was close to a year of negotiation, as parties would have to try again to bridge what amounted to a two billion dollar gap between the offer and ask.

The FT broke the news in late May that Hologic was offered a non-binding proposal from Blackstone and TPG at between $70-$72 per share, $16.3bn to $16.7bn. While the news also included that that bid had been rejected, the stock shot up nearly 20% and never retreated since that time, as this type of buyout interest is rarely something that just dies out after one rejected bid. Talks were intermittent over the next several months, and then by September, the private equity firms formally revived their joint takeover effort, offering total consideration of up to $79 per share in cash.

The transaction, announced in October 2025, represented an enterprise value of about $18bn, or 11x Hologic’s pro forma EBITDA (LTM September 2025) of $1.6bn.

Blackstone declined to comment. Hologic did not respond to requests for comments.

The syndication of debt tied to Hologic’s take-private officially launched this week. The $7bn dollar-and-euro loan facility was already oversubscribed just two days after the launch despite its pro forma net leverage of 7x — a sign of strong investor demand.

In addition to the publicly syndicated portion, the debt financing also includes a $750m revolver due 2031, a $2.5bn TLA due 2029 held by banks, and a privately placed $2bn second lien term loan. Blackstone, TPG, and other investors contributed just under $6.5bn of equity.

A loan-only financing option is rare for a jumbo buyout. Deals of similar sizes, like in the cases of Sealed Air and Electronic Arts, often include a bond portion. One notable exception in 2025 was Thoma Bravo’s take-private of Dayforce financed by a hefty $5.5bn TLB in one of the biggest new money deals last year.

A priority for the arrangers of Hologic’s financing package — in order to appeal the BSL market — was to design a prepayable structure. That’s why the syndicated option that included the TLA, which has no call premium, and TLB with just a 101 soft call for 6 months, proved to be the most attractive, sources said.

TLAs are typically held by banks. In this case, the TLA was priced in the SOFR+250-275bps range, lower than the S+275bps-300bps offered on the TLB, according to sources, making it a cheaper option that functions much more like a bridge loan given its three-year tenor. Having part of the funds parked with the arrangers themselves also makes lenders comfortable with committing to the deal, sources added.

Other deals that feature TLAs include EA, Sanmina, and HNI. BioMarin’s acquisition of Amicus Therapeutics, a similar healthcare deal that is also expected to launch this month, also includes a TLA portion, 9fin reported.

In lieu of bonds, Hologic’s debt package includes a second lien loan tranche. Private credit had been floated as an option during the early stages of the dealmaking process — 9fin reported in October that direct lenders prepared a $9bn package to rival with the banks. The unitranche was priced in the range of S+475bps, with lenders such as Apollo, Blackstone Credit, Golub, and HPS participating.

Though the private credit option wasn’t chosen, the work wasn’t for nothing. After signing the acquisition agreement, the sponsors had a window to privately place a second lien loan ahead of the BSL syndication for a much smaller underwriting fee, another person familiar with the situation said. A number of funds that had been interested in providing a direct loan subsequently pivoted to the second lien transaction.

Lenders to the second lien tranche include PSP, Oaktree and Franklin Templeton, Bloomberg reported.

“Ultimately it was a pocket and a pricing exercise for people, not a credit issue,” the person said.

The deal’s oversubscription didn’t come as a surprise. With extensive premarketing late last year, it is likely that the deal was done even before its official launch this year, sources said.

“It was so highly in demand, we got less than half of what we wanted to get our hands on,” a lender said.

It is also in the interest of the arrangers to bring the syndication early when market sentiment is positive — though a little less so than when the deal got signed back in October with macro noises over the past two months — so that it can be priced on the tighter end.

Initial price talks were S+275bps-300bps for the dollar loan portion and E+300bps-325bps for the euro loan portion, which aligns with the peer average. Both were also offered with a 99.5 OID. 9fin data shows that among the healthcare deals priced over the past four years with Ba3/B+ facility ratings, the average margin was 2.79% over SOFR and 3.45% over Euribor.

“They have to offer decently attractive pricing just because the size is so massive,” a portfolio manager said. “They have to incentivize people to put an outsized ticket.”

Ultimately, the demand came down to the strong credit fundamentals of Hologic.

Prospective lenders speaking to 9fin were drawn to Hologic’s sticky, recurring revenue business model. Between its leading market position and a diverse revenue base — with the company’s top 10 customers representing only 16% of revenue — the credit story was an easy sell.

“We looked at the business lines and they seem to be the leading company in its respective areas that they operate. They are pretty diversified,” a buysider said.

In the LevFin market, healthcare deals have diverged as of late. Credits with insurance or heavy government reimbursement exposure have raised concerns among lenders, due to the uncertainty surrounding the Affordable Care Act, a banker said. In ModivCare’s Chapter 11 filing, the company blamed changes in the Medicare advantage plan for its declining reimbursements. Prospect Medical and Omnicare are also among issuers with insurance exposure that went bankrupt over the past year.

Hologic’s exposure to Medicaid and Medicare is limited, the buysider said, which makes them more comfortable with the situation.

A direct lender who participated in the second lien agreed that the credit is good, and they can opportunistically put the paper into different funds.

In the end, this is a “big win for the broadly syndicated market,” another buysider said.

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