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This recent FTC action seems kind of strange, coming 10 years after the fact. Anyone understand this?



UPDATE 2-FTC probes Immucor's past acquisitions; shares down
Fri Oct 26, 2007 1:09pm EDT

By Jennifer Robin Raj

BANGALORE, Oct 26 (Reuters) - Medical equipment maker Immucor Inc (BLUD.O: Quote, Profile, Research) said the U.S. Federal Trade Commission is investigating whether the company violated antitrust laws on some acquisitions it made in the late 90's, sending its shares down as much as 14 percent. The FTC inquiry comes close on the heels of a probe by the U.S. Securities Exchange and Commission into alleged improper payments to certain Italian physicians by its Italian subsidiary and Chief Executive Gioacchino De Chirico.

The FTC is investigating whether Immucor violated federal antitrust laws on three acquisitions between 1996 and 1999 and whether it engaged in unfair pricing in the marketplace.

Immucor's General Counsel and Secretary Phil Moise said by phone the probe relates to the acquisitions of Canada-based Dominion Biologicals Ltd in 1996, Gamma Biologicals Inc in 1998, and the purchase of the blood bank assets of Biopool International Inc in 1999.

In its 1999 annual report, Immucor had said it had become the market leader in North America in terms of sales after the acquisitions of Gamma and Biopool's blood bank assets.

The company had also stated that subsequent to the acquisitions, its sole U.S. competitor in blood banking reagents was Ortho-Clinical Diagnostics, a unit of a Johnson & Johnson (JNJ.N: Quote, Profile, Research).

Gamma, which was acquired for $27.3 million, was described in the report as the third largest domestic blood bank serology company before the acquisition.

Prior to 1999, Gamma and Ortho-Clinical Diagnostics were stated in its annual reports as primary U.S. competitors for blood bank reagents.

In its latest annual report for 2007, Immucor said Ortho-Clinical Diagnostics remains its main competitor in the U.S.

"We have been the North American market leader since 1999," the report stated.

The company said in a statement that it intends to cooperate with the trade regulator and does not know how the inquiry will affect its business.

Shares of the company recovered some of their early losses and were trading down more than 9 percent to $32.00 in afternoon trade on the Nasdaq.
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No

not regularly anyway. I went bullish on this in CAPS just before the odd FTC inquiry. There should be a transcript of the conference call available tomorrow on the website, so I will likely give it a read and perhaps write an overdue CAPS blog.

Zz
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I'm out there and following BLUD for several years. I have tried to buy it in the low 20's and sell above $34-36 but got stung when it dropped this month. I thought it would be "different this time" and keep rising. What news caused the drop?
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I just read over the last quarter transcript. I can't say I really have a good feel for this company. In the last few months we have the 'old' antitrust investigation, and a recent quarterly report. A recent loss of business with LabCorp is a negative as well. The last quarter saw margins dip a bit, but they are still healthy. The explanation being newer instrument rollouts which are lower margin. BLUD looks to make its money on higher-margin consumables run on its instruments.

Still this is a pretty recession proof business, so I'm inclined to stick with BLUD as a CAPS play, but I don't think I really understand the business well enough to invest for real. So, I have to have a bit of faith that margins will begin to pick up again, but that will likely be a year from now or later.

(This will be my caps pitch)
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