Zoetis expands into veterinary diagnostics arena by acquiring Abaxis

Zoetis Inc. (ZTS), a former subsidiary of Pfizer (PFE), has agreed to acquire Abaxis Inc. (ABAX) for close to $2 billion as the former looks to expand into the area of veterinary diagnostics which has a vast scope compared to animal health. The $83 a share deal, which will be funded through a combination of cash and debt, is expected to add to Zoetis’ earnings in 2019 and be complete before the end of this year.

Abaxis is based in California and provides veterinary diagnostics and consumables products. Zoetis currently holds a small share in diagnostics in terms of revenue, and the deal makes sense as the market for veterinary diagnostics is estimated to grow to more than $3 billion over the next four years. This buyout unfolds many opportunities for the New Jersey-based company, which is facing strong competition in its current space.