A Medical Device Daily Staff Report
Invacare (Elyria, Ohio) and AssuraMed (Twinsburg, Ohio) reported that they have signed a definitive agreement under which Invacare will sell Invacare Supply Group (ISG), its domestic medical supplies business, to AssuraMed for $150 million, subject to certain closing adjustments.
This divestiture is consistent with Invacare's focus on its globalization strategy to harmonize core global product lines and reduce complexity within its business.
AssuraMed, said that this strategic purchase allows the company to strengthen its position as a leader in the medical supplies industry.
"We are thrilled to have ISG as a complement to our Independence Medical business," said Michael Petras, Jr, AssuraMed CEO. "ISG's strong position in the marketplace and focus on customer service are an excellent fit with our product portfolio and focus on customer solutions. This strategic acquisition builds on our strengths in providing disposable medical supplies to the chronic disease market. Our new combined customer base will benefit from enhanced distribution capabilities and services that we will be able to provide.''
The transaction, which is expected to close in early 2013, is subject to regulatory approval and other customary closing conditions.
Subject to certain closing adjustments and any restructuring charges, Invacare preliminarily estimates that it will realize net proceeds from the sale of the ISG business of about $140 million, net of tax and expenses. In the near term, Invacare intends to use the proceeds to strengthen its balance sheet and reduce debt outstanding under its revolving credit facility. As previously disclosed by Invacare, net sales for the ISG business were about $299.5 million for 2011 and $246.4 million for the first nine months of 2012. Earnings before income taxes were about $8.0 million for 2011 and $5.1 million for the first nine months of 2012.
In other dealmaking activity:
• Halma (Cincinnati), a health and environmental technology group, said that the acquisition of MicroSurgical Technology (MST; Redmond, Washington) was completed on Dec. 18.
MST makes ophthalmic surgical products, focusing on single-use devices used in cataract surgery. The initial cash consideration is $57 million (£35.2 million) for the share capital plus $2 million (£1.2 million) for cash retained in the business. The combined consideration is adjustable dollar for dollar if the level of working capital at closing falls outside an agreed range.
Contingent consideration of up to $43 million (£26.5 million) is payable if earnings for the two years to March 2015 exceed pre-determined targets. Audited accounts for the full financial year ended 31 December 2011 show revenue of $20.4 million (£12.6 million). Unaudited accounts for the first nine months of the financial year ending Dec. 31 show revenue of $17.1 million (£10.6 million).
MST is being acquired from management and several private shareholders. Existing management will remain in place and will continue to operate the business in Redmond. The acquisition, which is expected to be immediately earnings-enhancing, has been funded from Halma's cash and debt facilities.
• PathCentral (Irvine, California), a technology-enabled company serving the pathology community, reported the sale of its diagnostic laboratory business to Ascend Clinical (San Francisco), an end-stage renal disease (ESRD) laboratory testing firm for independent dialysis clinics in the U.S.
Ascend has expertise in both diagnostic testing and IT applications and infrastructure. Ascend says it intends to leverage all the features PathCentral has developed in its APLIS product, as well as continue the intensive focus on new test development to provide seamless lab service to all clients.
With the sale, PathCentral will expand its focus on its cloud-based technology business units, including its Anatomic Pathology Laboratory Information System (APLIS) and the PathCentral Online Professional Network. The network, slated for launch in early 2013, is designed to connect pathologists around the world with subspecialty expert consultants. PathCentral's expertise in cloud-based solutions and focus on pathology was built on more than 10 years of established web-based product development.
PathCentral's core IT infrastructure is the backbone of almost every reference laboratory offering remote review of cases via "technical only" testing today, according to the company. Applying PathCentral's expertise in cloud-based end-to-end enterprise solutions with the growing field of digital pathology in an integrated professional network is the next phase of PathCentral's technical evolution, the company noted.
• Waud Capital Partners (Chicago) said its portfolio company, ProNerve (Broomfield, Colorado), has acquired PhysIOM Group (Fort Collins, Colorado), a provider of intraoperative neuromonitoring (IONM) services in the western and southeastern U.S.
PhysIOM serves over 290 hospital clients across 33 states. PhysIOM represents ProNerve's third acquisition in 2012 and establishes the company as a national provider of IONM services and the market leading provider of IONM services in the western U.S.
"Having a stated objective of building the leading provider of IONM services in the western United States, we are thrilled to complete this business combination," said David Neighbours, a partner at Waud Capital Partners.
• Epic Health Services (Hackensack, New Jersey), a provider of pediatric and adult home healthcare, said it has acquired AmeriCare, a Medicare-certified home health agency with three locations in the greater Boston area.
The AmeriCare acquisition provides Epic with three new service lines: home nursing for clients with psychiatric and other behavioral issues, private-pay personal care for older adults, as well as nursing and aide services for other elderly and disabled clients.
"For over ten years, Epic has been a recognized leader in in-home private duty nursing as well as pediatric therapy in Texas and subsequently in New Jersey, Pennsylvania and Delaware," said John Garbarino, Epic's president/CEO.