>A Medical Device Daily
Inverness Medical Innovations (Waltham, Massachusetts) and Concateno plc (London) reported reaching an agreement on a proposal for Inverness to acquire all of Concateno's outstanding share capital.
Concateno is a leading European supplier of drugs-of-abuse testing products and services, with 2008 revenues of about £47.5 million (about $76 million). Concateno is quoted on the AIM market of the London Stock Exchange.
The acquisition is expected to be implemented by way of a court-approved "scheme of arrangement" under Part 26 of the United Kingdom Companies Act 2006.
The scheme of arrangement is subject to approval by the shareholders of Concateno and sanction of the High Court of Justice in England and Wales, as well as other customary conditions.
If approved, the acquisition is expected to become effective during 3Q09.
Under the proposed terms, each holder of Concateno shares will receive, for each Concateno share, 79 pence in cash and 0.02 shares of Inverness common stock, based on Inverness' closing price per common share on the New York Stock Exchange on June 4, of $34 and applying an exchange rate of £1.00:$1.61, for a total implied value per Concateno share of 121.24 pence.
Based on information supplied by Concateno, there are roughly 103.2 million Concateno shares currently issued and outstanding after consideration of certain shares which will be repurchased by Concateno for nominal consideration and cancelled as a result of the transaction.
In the event that, as a result of changes in Inverness' stock price and exchange rates, the value of the total consideration payable per Concateno share is less than 120 pence, Inverness will be obliged to provide further consideration to Concateno shareholders such that the overall value of the consideration per Concateno share is 120 pence.
Any such additional consideration will consist of up to 1 million pounds cash plus up to 500,000 additional shares of common stock or, at its option, the cash equivalent thereof. In the event that the cash consideration of up to £1 million is not needed to increase the overall consideration to 120 pence, the unused portion will be paid to certain key managers of Concateno.
Inverness CEO Ron Zwanziger said, "Concateno's unique position in the European point of care, drugs of abuse testing market is a perfect complement to our existing drugs-of-abuse business, which operates primarily in the U.S. There is also very little product overlap because we already supply Concateno with many of its visually-read drugs of abuse tests while Concateno manufactures meter-read products through its Cozart subsidiary."
Keith Tozzi, chairman of Concateno added, "By successfully executing an acquisition-based growth strategy, Concateno has become an important player in the European drugs-of-abuse testing business, offering its wide customer base a complete range of testing solutions. We believe that Inverness' proposal reflects the growth potential of the business, and that under Inverness' ownership, Concateno can expand to take further advantage of a range of attractive international opportunities."
Inverness' products and services, as well as its new product development efforts, focus on infectious disease, cardiology, oncology, drugs of abuse and women's health.