Good. I was getting tired trying to make sense of the gargantuan valuations of Natera and Guardant Health anyway.

Abbott Laboratories ($219 billion valuation) has agreed to acquire Exact Sciences for $21 billion, or $105 per share on a fully diluted basis.

Although Abbott's Diagnostics segment is the second-largest among its four business units in terms of revenue output, it has been a huge drag on growth. In the first nine months of 2025, the unit grew revenue just 0.6% from the year-ago period to $6.5 billion. That easily lagged behind the growth rates of Medical Devices ($15.7 billion in sales, +12.4% YoY), Nutrition ($6.5 billion in sales, +4.7% YoY), and Established Pharmaceuticals ($4.2 billion, +7.5% YoY).

By contrast, Exact Sciences grew total revenue 15.7% in the first nine months of 2025. All of its revenue will be accounted for in Abbott's Diagnostics segment, which will increase from roughly $9 billion per year to over $12 billion.

What Happens Now?

The size of the acquisition draws out the timelines a bit. Abbott and Exact Sciences expect the acquisition to close in Q2 2026.

Although the boards of directors of both companies unanimously approved the merger, shareholders of the Cologuard maker (me, you, Vanguard, the fine citizens of Norway, etc.) have to approve the acquisition in an upcoming vote. There's no reason to expect shareholders will reject the acquisition.

Could the Acquisition Fall Through?

There's not much overlap between the products from Exact Sciences and those stuffed in Abbott's struggling Diagnostics segment. There's no reason to expect antitrust concerns will torpedo the deal, and that's before considering the current administration's pro-business stance.

If an acquisition isn't completed by November 19, 2026, then Exact Sciences must pay Abbott $628.7 million. Again, that seems pretty unlikely.

How Do You Manage Your Position?

The acquisition price is $105 per share. I would expect to exit my positions (Finch Trades, pre-Finch Trades) at or near that price.

An acquisition presents a few options:

• Do Nothing: If you do nothing, then upon the closing of the acquisition your brokerage will automatically sell your shares (and any options) at the full acquisition price. You'll automatically receive the full cash amount in your account. The only "downside" is you'll have to wait until the closing date.
• Sell Immediately: Maybe you think selling at $100 per share is good enough – that's totally up to you. Generally speaking, unless you're a day trader for some reason, there's rarely a reason to flip a position and rush into another one.
• Wait a Bit: Maybe you want to bask in the glory, take a victory lap, call off work, and swing around light poles in town while showing strangers screenshots on your phone. You're kind of a dick, but that's totally up to you, too.

In all seriousness, waiting a bit provides some strategic value. Although rare, there could be a bidding war if another suitor emerges to challenge Abbott. It seems to me that a $21 billion acquisition price is pretty generous and tough to beat.

But bidding wars haven't been so rare lately. There have been two in November 2025 alone.

Novo Nordisk and Pfizer duked it out over the obesity drugmaker Metsera (Pfizer won with an offer of up to $10 billion). As you read this, Alkermes and Lundbeck are duking it out over the narcolepsy drug developer Avadel Pharmaceuticals with bids reaching a whopping $2.37 billion.

Counterintuitively, bidding wars are actually more common in larger acquisitions. More often, challengers step into the ring (and their lawyer's office) when a company being acquired has desirable assets and growth.

Exact Sciences has the most successful diagnostic test ever in Cologuard and a portfolio of molecular residual disease (MRD) and multi-cancer early detection (MCED) tools. It will generate net income in 2026 and over $500 million in operating cash flow – something no competitor can offer. A $21 billion offer from Abbott is quite generous and applies a growth premium to emerging products, but it wouldn't be impossible for another company to sweeten the pot by a couple billion.

For example, Roche acquired Flatiron Health in 2018. The deal was a bit unusual because Flatiron Health represents a technology vertical that drug developers and even large diagnostics providers don't play in. Flatiron has since become one of the dominant multi-omics and clinical data providers on the planet, so, naturally, Roche is trying to sell it.

Why not acquire Exact Sciences with the explicit intention to roll up both companies and spin them off again? Maybe even include the equity interests in Freenome with the new SpinCo. It would fill one of the obvious gaps for Exact Sciences (clinical data), combine up to four major multi-omics platforms, and create a scary-competent team for what's expected to be a globally important tech vertical in healthcare.

A girl can dream.

A bidding war is very rare, but not impossible. Maybe wait until after Thanksgiving or early December to make a decision to exit.

Margin of Safety & Conviction

Exact Sciences is considered a Current Compounder position with the following Conviction rating.

• 1 = High
• 2 = Above Average (no change)
• 3 = Average
• 4 = Below Average

The estimated fair valuation based on my current model is below:

• Market close November 19: $86.18 per share
• Modeled Fair Valuation: $64.40 per share
• Allocation Range: Up to 15%

Exact Sciences reported 189.471 million shares outstanding as of October 31, 2025. The modeled fair valuation above assumes 193.261 million shares outstanding, which is equivalent to 2% dilution.

Further Reading

• November 2025 press release from Abbott announcing the acquisition
• November 2025 press release from Exact Sciences announcing the acquisition (the companies issued a joint press release, so they're identical)
• November 2025 regulatory filing (8-K) detailing the proposed acquisition
• October 2025 quarterly earnings preview for the Solt DB coverage ecosystem

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