A Medical Device Daily

Biomedical testing provider Beckman Coulter (Fullerton, California) reported the completion of its $780 million acquisition of Olympus' (Tokyo) lab-based diagnostics business. This acquisition, first reported in March (Medical Device Daily, March 2, 2009), extends Beckman Coulter's leadership position in chemistry and automation, the company said.

The completion of this transaction adds considerable product depth and significantly expands our geographic reach and scale," said Scott Garrett, chairman, president/CEO of BC. "We are confident that the combination of Olympus diagnostics with our business will provide many cross-selling opportunities – the most compelling being promotion of Beckman Coulter's leading Immunoassay products to the loyal base of Olympus' chemistry customers."

"The deal was funded as follows: About $495 million in net proceeds raised from the issuance of two $250 million senior note offerings of 6- and 10-year maturities with 6% and 7% coupons, respectively; and about $240 million in a common stock offering comprised of approximately 4.7 million shares issued to the public at $53 per share, or $50.75 net proceeds per share.

The company said it expects to provide additional details on the impact of the transaction on 2009 results during the company's 3Q09 earnings news release and conference call in late October, and expectations for 2010 will be included at the company's annual business review on Dec. 17.

In other dealmaking news:

• Thoratec (Pleasanton, California), a developer of device-based mechanical circulatory support therapies to save, support and restore failing hearts, and HeartWare International (Framingham, Massachusetts), which develops miniaturized implantable heart pumps, reported that they have mutually agreed to terminate their merger agreement, that was first disclosed in February. Under the original plan, Thoratec was to acquire HeartWare for $282 million.

The decision to terminate the merger agreement was made in response to a determination by the U.S. Federal Trade Commission (FTC) to file a complaint in the U.S. Federal District Court challenging the proposed acquisition (Medical Device Daily, July 31, 2009).

"We are disappointed by the Federal Trade Commission's decision to seek to enjoin the transaction," said Gary Burbach, president/CEO of Thoratec. "Although we continue to believe in the benefits of the transaction, our management and board of directors have determined that it was in the best long-term interests of Thoratec and its shareholders not to pursue what would likely be a protracted, costly and unpredictable litigation process. We remain focused on building a much broader market for VADs in treating advanced stage heart failure," he added.

"After discussions with Thoratec and our board of directors, we agree that litigation to pursue the acquisition by Thoratec is not in the best interests of our shareholders. While we too are disappointed with the decision by the FTC, we are, nonetheless, excited about HeartWare's prospects going forward on a stand-alone basis and look forward to serving patients and clinicians," said Doug Godshall, president/CEO of HeartWare.

"Today's announcement is a major victory for the patients who rely on these critically important life-saving medical devices. Now that Thoratec and HeartWare have called off their proposed merger, U.S. consumers who are already facing increasing health care costs will reap the benefits of both current and future competition between these two companies," said Richard Feinstein, Director of the FTC's Bureau of Competition.

• Lake Region Medical Ltd. (New Ross, Ireland), a subsidiary of the closely-held Lake Region Medical (Chaska, Minnesota), reported that it has acquired Brivant Medical (Galway, Ireland). The acquisition was effective July 23. Terms were not disclosed. Both the American and Irish companies are global OEM leaders for medical device guidewires and related products for minimally-invasive cardiac surgery and other procedures.

Lake Region Medical has been doing business in New Ross, Ireland, as Lake Region Medical Ltd., since 1994, while the U.S. parent company with more than 1,500 employees globally, has more than 50 years experience in the medical device arena.

Brivant Medical and Lake Region Medical Ltd., currently employ about 800 people at the two locations in Ireland. Spokespersons for both Brivant and Lake Region said the new acquisition will preserve and ultimately expand jobs at the company sites in Galway and New Ross, Ireland, and Chaska, Minnesota.

The companies believe that Brivant's expertise, technology, research and development, operations, and product portfolio readily strengthen Lake Region's presence in the interventional guidewire marketplace.

"Based on performance, Brivant Medical has a very stable and capable management team," said Ron Von Wald, Global Marketing Director. "Lake Region Medical not only purchased Brivant Medical for its assets, but also for its outstanding personnel at all levels of the organization." Von Wald said the only Brivant Medical management change is that the team will now report directly to John Harris, who has been promoted to the position of VP of Outside of U.S. Operations.

• Cardinal Health (Dublin, Ohio) has agreed to acquire the assets of privately held Biotech, an operator of PET cyclotrons and nuclear pharmacies in the Southwestern U.S.

Cardinal owns and operates a network of nearly 160 nuclear pharmacies and operates 26 cyclotron-based PET radiopharmaceutical manufacturing facilities. These facilities are registered with the FDA to manufacture PET imaging agents that are used by physicians to diagnose various medical conditions.

With the addition of Biotech's four nuclear pharmacies, Cardinal Health will expand its existing U.S. PET business. The facilities are located across Arizona, Nevada, New Mexico and Texas.

• National Health Investors (NHI; Murfreesboro, Tennessee) has completed its previously disclosed purchase/leaseback of a fourth Texas skilled nursing facility owned by an affiliate of Legend Healthcare (San Antonio), a privately-owned company. NHI purchased three facilities from Legend on June 30 for $39.7 million. The fourth facility was purchased on July 31 for $15.8 million. The purchases were funded from NHI's accumulated cash liquidity. The four facilities are being leased to Legend for 15 years at an initial lease rate of 10% plus annual increases. Legend has the option after 7 years to purchase the facilities at fair market value, but not less than $55.5 million.

NHI is a healthcare real estate investment trust that specializes in the financing of healthcare real estate by first mortgage and by purchase and leaseback transactions.

• JAG Media Holdings (Boca Raton, Florida) reported that it has completed the acquisition of CardioGenics (Mississauga, Ontario). In connection with the acquisition, the company acquired all of the outstanding shares of common stock of CardioGenics, excluding 173,869 CardioGenics common shares in the aggregate owned by two minority stockholders of CardioGenics.

CardioGenics stockholders received 422,183,610 shares of JAG Media common stock.

"It is extremely gratifying to complete the acquisition of CardioGenics," said Thomas Mazzarisi, former chairman/CEO of JAG Media. "We have had a long and sometimes turbulent search for an appropriate acquisition partner for our company, but I'm confident that we have now found the right one in CardioGenics. CardioGenics is an exciting company preparing to deploy its innovative technology and products in the point-of-care in-vitro-diagnostics market and has a management team with the credentials and track record to maximize such deployment, all of which, I believe, provides excellent upside potential for the company's stockholders."

"With the required funds at hand, the commercialization of CardioGenics technology and products will proceed at a much faster pace to bring much-needed products to the In-Vitro-Diagnostics market," said Yahia Gawad, CEO of CardioGenics.