Ortho Clinical Diagnostics Sued After Proposed Combination

On Monday a case was filed in the District of New Jersey by investor Stephen Bushansky against Ortho Clinical Diagnostics Holdings PLC and its board, regarding alleged violations of the Securities Exchange Act.

Ortho Clinical Diagnostics is a laboratory testing company focusing on in vitro testing solutions and a publicly traded company. An offer was made from Coronado Topco Inc. a trust company, and Quidel, a rapid diagnostics testing company, for a merger, wherein both Ortho and Quidel would be acquired and merged under Topco. This proposed merger, the complaint said, resulted in several filings with the Securities and Exchange Commission regarding the financial status of the companies as well as other required information for the business combination.

The plaintiff indicates that in all previous financial filings that the stability and growth of Ortho was highlighted. However, the filings made as a part of the business combination, per the plaintiff, are incomplete and misleading as to the benefits of the merger for the common stock holders as a opposed to those of the board.

The plaintiff specifically notes that there was an omission of any net operating losses, synergies estimate for the new business combination, and any underlying information for the adjusted earnings and unlevered free cash that would be available after the merger.

Plaintiff is seeking an injunction halting the business combination until the missing information is disseminated, damages in the event that the injunction is not provided, as well as declaratory action as to the violations of SEC Rule 14a-9. Plaintiff is represented by Weiss Law LLP.