A Medical Device Daily

NationsHealth (Sunrise, Florida) reported that it has entered into a definitive merger agreement in which it will be acquired and taken private by ComVest NationsHealth Holdings, a wholly-owned subsidiary of ComVest Investment Partners III, L.P., a Florida-based private equity firm. ComVest will acquire all issued and outstanding shares of common stock of NationsHealth for 12 cents per share in cash, other than certain stockholders and members of NationsHealth management. The proposed transaction is expected to close by 3Q09.

Glenn Parker, MD, CEO of NationsHealth, said, "This proposed transaction provides NationsHealth the additional capital needed to execute upon its strategic initiatives. Upon completion of the transaction, NationsHealth will become a private company that will provide us greater flexibility to accomplish our long-term plans, and produce a better partnership with our customers, suppliers and employees."

In connection with the transaction, NationsHealth entered into amendments with its credit facility lender and subordinated note holder, pursuant to which both debt facilities will remain in existence on substantially similar terms and conditions following the closing of the transactions contemplated under the definitive merger agreement. Concurrently with the execution of the definitive merger agreement, ComVest has provided NationsHealth a bridge loan in the principal amount of $3 million, which will convert into shares of NationsHealth convertible preferred stock at 12 cents per share upon closing of the transaction. ComVest will make an additional $5 million investment in NationsHealth at closing in the form of NationsHealth convertible preferred stock at 12 cents per share, the proceeds of which will be used to take NationsHealth private and for general working capital purposes. In addition, ComVest shall have the right to make an additional $2 million investment in NationsHealth convertible preferred stock at 12 cents per share for a period of one year following the closing date.

A special committee of independent directors and the NationsHealth board have approved the definitive merger agreement and recommended to the NationsHealth stockholders that they approve the definitive merger agreement. The transaction is subject to approval by NationsHealth's stockholders, as well as other customary closing conditions. Additionally, stockholders representing more than 50% of the issued and outstanding shares of common stock of NationsHealth have entered into a voting agreement in favor of the merger.

Deloitte & Touche Corporate Finance is acting as financial advisor to NationsHealth. Ladenburg Thalmann & Co. has rendered a fairness opinion in connection with the merger transaction to NationsHealth's special committee. Legal counsel to NationsHealth's special committee is Broad and Cassel.

Legal counsel to NationsHealth and its board is McDermott Will & Emery. Legal counsel to ComVest is Foley & Lardner.

NationsHealth seeks to improve the delivery of healthcare to Medicare and managed care beneficiaries by providing medical products and prescription related services. NationsHealth provides home delivery of diabetes supplies and insulin pumps, medications and other medical products to patients across the nation.

RoundTable Healthcare Partners, an operating-oriented private equity firm focused exclusively on the healthcare industry, reported that its portfolio company, Avalign Technologies (both Lake Forest, Illinois) a full-service supplier of instruments, implants, and delivery systems to the OEM medical device industry, has completed the acquisition of NGInstruments (Warsaw, Indiana). NGInstruments is a family-owned manufacturer of surgical cutting tools for the medical industry, specializing in drills, taps, and reamers. The financial terms of the transaction and RoundTable's investment were not disclosed.

As part of the transaction, RoundTable successfully facilitated an amendment to Avalign's senior credit facilities, as well as a private placement of subordinated notes. The senior credit facilities were led by The PrivateBank and Trust Company with GE Capital, Healthcare Financial Services participating in the credit. Avalign's subordinated notes were purchased by RoundTable Capital Partners, RoundTable's $200 million captive subordinated debt fund. RoundTable and certain shareholders of Avalign and NGInstruments made an equity investment in Avalign as part of the transaction.

In other dealmaking news:

• Bausch & Lomb (Rochester, New York), the global eye health company, and 20/10 Perfect Vision (Munich, Germany, the femtosecond laser developer, have completed their transaction to form a joint venture focused on the laser vision correction industry. Financial terms were not disclosed.

The new company – Technolas Perfect Vision – combines the refractive eye surgery assets of both businesses, and will utilize its global service and support infrastructure to introduce new, laser-based vision correction procedures, initially focusing on treatments for presbyopia.

Technolas Perfect Vision is targeting the presbyopia market, providing clinicians with advanced excimer and femtosecond laser technology designed specifically to restore near vision in those patients who have lost the ability to visually accommodate. One of the most exciting new procedures is Intracor, an intrastromal treatment designed to restore near vision

• Kindred Healthcare (Louisville, Kentucky) reported that it has provided Ventas (Chicago) with notices to renew the master lease agreements for an additional five years for 87 nursing centers and 22 long-term acute care (LTAC) hospitals. The initial lease term for the renewal facilities was scheduled to expire in April 2010. In addition, Kindred has entered into definitive agreements with Ventas to purchase for resale six under-performing nursing centers currently leased from Ventas.

The renewal facilities contain 10,745 licensed nursing center beds and 1,754 licensed hospital beds. Kindred's option to renew the leases on the facilities would have expired on April 30, 2009. The effectiveness of the renewals is contingent upon there being no events of default under the master lease agreements upon the renewal effective date in April 2010.

Kindred and Ventas also reported that they have entered into definitive agreements for Kindred to acquire the real estate related to six nursing centers currently leased from Ventas for $55.7 million. In addition, Kindred will pay a lease termination fee of $2.3 million. The current annual rents for the nursing centers are about $6 million.

The nursing centers, which contain 777 licensed beds, generated pretax losses of about $3 million for the year ended Dec. 31, 2008 and about $2 million for the three months ended March 31, 2009. Upon purchase of the nursing centers, Kindred said it expects to account for the operations of the nursing centers and the loss on these transactions as discontinued operations, and expects to dispose of them as soon as possible..

Kindred expects to generate about $10 million to $15 million in proceeds from the sale of the nursing centers and the related operations. Kindred expects to record a net loss of about $30 million to $35 million in the 2Q09 relating to these divestitures.

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