Alere 8-K Inverness Medical Innovations, Inc. Announces Offering of $200 Million of Senior Subordinated Notes

Exhibit 99.2

INVERNESS MEDICAL INNOVATIONS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

Overview

     On May 9, 2008, we completed our acquisition of Matria Healthcare, Inc. (“Matria”), for consideration per share of (i) $6.50 in cash and (ii) convertible preferred stock of Inverness having a stated value of $32.50 per share (convertible at $69.32, as calculated by dividing the $400 per share liquidation preference by the 5.7703 conversion rate) or, at the election of Inverness, $39.00 in cash. The convertible preferred stock was issued in a tax-deferred transaction and provides for a three percent dividend. The total transaction consideration was approximately $1.1 billion, consisting of approximately $834.6 million to acquire the Matria shares of common stock and options and assumption of approximately $279.2 million of Matria’s indebtedness outstanding. The transaction was an indirect acquisition through a merger of a newly formed, wholly-owned subsidiary of Inverness with and into Matria. Matria, headquartered in Marietta, Georgia, is a national provider of health enhancement, disease management and high-risk pregnancy management programs and services. Through its Health Enhancement and Women’s and Children’s Health divisions, Matria provides services to more than 1,000 employers and managed care organizations.

     The following unaudited pro forma condensed combined statement of operations (the “Pro Forma Statement of Operations”) reflects our acquisition of Matria as if the acquisition had occurred on January 1, 2008. The Pro Forma Statement of Operations is based on the respective historical consolidated financial statements and the notes thereto of Inverness and Matria. The acquisition is reflected using the purchase method of accounting and the estimates, assumptions and adjustments described below and in the notes to the Pro Forma Statement of Operations.

     For purposes of preparing the Pro Forma Statement of Operations, the historical financial information of Inverness and Matria is based on the year ended December 31, 2008.

     The historical Matria financial information included in the Pro Forma Statement of Operations includes Matria’s results of operations for the pre-acquisition period ended May 8, 2008, which represent the historical pre-acquisition results of Matria. The historical results of operations for Matria for the period from May 9, 2008 to December 31, 2008 are reflected in our historical results of operations for the year ended December 31, 2008.

     The Pro Forma Statement of Operations is presented for illustrative purposes only and does not purport to be indicative of the results of operations for future periods or the results that would have been realized had the acquisition of Matria been consummated as of January 1, 2008. The pro forma adjustments are based upon available information and certain estimates and assumptions as described in the notes to the Pro Forma Statement of Operations that management of Inverness believes are reasonable in the circumstances.

     The Pro Forma Statement of Operations and accompanying notes should be read in conjunction with the historical consolidated financial statements and notes thereto of Inverness included in our annual report on Form 10-K for the year ended December 31, 2008, as amended, as well as the historical consolidated financial statements and notes thereto of Matria included in its annual report on Form 10-K for the year ended December 31, 2007, as amended, and its quarterly report on Form 10-Q for the three months ended March 31, 2008.

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INVERNESS MEDICAL INNOVATIONS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2008
(unaudited)
(in thousands, except for per share amounts)

				Matria			Matria							Pro Forma
				January 1, 2008			April 1, 2008							Combined
	Inverness			—March 31, 2008			—May 8, 2008			Adjustments				Company
Net product sales and services revenue	$	1,645,600		$	79,512		$	32,901		$	—			$	1,758,013
License and royalty revenue		25,826			—			—			—				25,826
Net revenue		1,671,426			79,512			32,901			—				1,783,839
Cost of net revenue		810,867			25,593			11,815			3,536		G		851,811
Gross profit		860,559			53,919			21,086			(3,536	)			932,028
Operating expenses:
Research and development		111,828			—			—			—				111,828
Sales and marketing		386,284			11,676			4,260			14,268		A		416,488
General and administrative		298,595			36,567			33,873			(19,740	)	A, E, G		349,295
Total operating expenses		796,707			48,243			38,133			(5,472	)			877,611
Operating income (loss)		63,852			5,676			(17,047	)		1,936				54,417
Interest and other (expense) income, net		(102,306	)		(5,290	)		(15,482	)		18,798		B, D, E		(104,280	)
(Loss) income before (benefit) provision for income taxes		(38,454	)		386			(32,529	)		20,734				(49,863	)
(Benefit) provision for income taxes		(16,686	)		162			(10,195	)		5,469		C		(21,250	)
Net (loss) income		(21,768	)		224			(22,334	)		15,265				(28,613	)
Preferred stock dividends		(13,989	)		—			—			(7,503	)	F		(21,492	)
Net (loss) income available to common stockholders	$	(35,757	)	$	224		$	(22,334	)	$	7,762			$	(50,105	)
Net loss per common share—basic and diluted	$	(0.46	)											$	(0.64	)
Weighted average shares—basic and diluted		77,778													77,778

The accompanying notes are an integral part of these unaudited pro forma condensed combined financial
statements.

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INVERNESS MEDICAL INNOVATIONS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS

NOTE 1 — BASIS OF PRESENTATION

     The accompanying unaudited pro forma condensed combined statement of operations for the year ended December 31, 2008 includes the historical results of Inverness and Matria as if this transaction had occurred on January 1, 2008.

Acquisition of Matria

     On May 9, 2008, we acquired Matria, a national provider of health improvement, disease management and high-risk pregnancy management programs and services. The preliminary aggregate purchase price was $834.6 million, which consisted of $141.3 million in cash, Series B convertible preferred stock with a fair value of approximately $657.9 million, $17.3 million of fair value associated with Matria employee stock options exchanged as part of the transaction and $18.0 million for direct acquisition costs. In addition, we assumed and immediately repaid debt totaling approximately $279.2 million. The operating results of Matria are included in our health management reporting unit and business segment.

     A summary of the preliminary purchase price allocation for this acquisition is as follows (in thousands):

Current assets	$	109,106
Property, plant and equipment		24,460
Goodwill		836,178
Intangible assets		325,385
Other non-current assets		27,184
Total assets acquired		1,322,313
Current liabilities		358,270
Non-current liabilities		129,486
Total liabilities assumed		487,756
Net assets acquired		834,557
Less:
Acquisition costs		17,961
Fair value of Series B convertible preferred stock issued (1,787,834 shares)		657,923
Fair value of stock options exchanged (1,490,655 options)		17,334
Cash consideration	$	141,339

     We expect that none of the amount allocated to goodwill will be deductible for tax purposes.

     Customer relationships are amortized based on patterns in which the economic benefits of customer relationships are expected to be utilized. Other finite-lived identifiable assets are amortized on a straight-line basis. The following are the intangible assets acquired and their respective amortizable lives (dollars in thousands):

	Amount		Amortizable Life
Core technology	$	31,000	3 years
Database		25,000	10 years
Trade names		1,185	5 months
Customer relationships		253,000	13 years
Non-compete agreements		15,200	0.75-3 years
Total intangible assets with finite lives	$	325,385

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NOTE 2 — PRO FORMA ADJUSTMENTS AND ASSUMPTIONS

     The following describes the pro forma adjustments made to the accompanying unaudited pro forma condensed combined statement of operations:

A. Represents amortization expense of the estimated value assigned to customer relationships, core technology, non-compete agreements and trade names, as discussed in Note 1, acquired in connection with the acquisition of Matria. The preliminary fair values of acquired intangible assets in connection with the acquisition of Matria and their respective useful lives are as follows:

	Fair Value		Life
	(in thousands)
Goodwill	$	836,178	Indefinite
Customer relationships		253,000	13 years
Core technology		31,000	3 years
Database		25,000	10 years
Trade names		1,185	5 months
Non-compete agreements		15,200	0.75-3 years
Total intangible assets	$	1,161,563

B.	Reflects the reversal of interest expense incurred by Matria related to pre-acquisition debt which was repaid by Inverness in connection with the acquisition of Matria.
C.	Reflects the adjustment of the historical tax provisions of Matria as a result of pro forma pretax losses incurred.
D.	Represents interest expense incurred on additional borrowings of $142.0 million under the existing credit facility used to finance a portion of the Matria acquisition.
E.	Represents the reversal of expenses incurred as a result of the consummation of the Matria acquisition and non-recurring expenses.
F.	Represents 3% dividend on the Series B Convertible Preferred Stock issued in connection with the Matria acquisition.
G.	Reflects reclassification of expenses between operating expenses and cost of goods sold to create consistency in reporting with Inverness reported results.

NOTE 3 — PRO FORMA NET LOSS PER COMMON SHARE

     For the year ended December 31, 2008, the unaudited pro forma combined company basic and diluted net loss per common share amounts are calculated based on the weighted average number of Inverness common shares outstanding as of December 31, 2008. Common stock equivalents resulting from the assumed exercise of Inverness’ stock options and warrants and the conversion of convertible debt and preferred stock are not included in the pro forma combined company diluted net loss per common share calculation for the year ended December 31, 2008 because inclusion thereof would be antidilutive.

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