A Medical Device Daily

Owens & Minor (Richmond, Virginia) said it has agreed to sell certain assets of its direct-to-consumer, diabetes supply business to Liberty Healthcare Group (Bala Cynwyd, Pennsylvania) for $63 million in cash. The assets include patient data and intellectual property. Owens & Minor will retain the remaining assets and liabilities, including accounts receivable.

"We are pleased to have the opportunity to transition this business to Liberty, which is among America's leading providers of diabetes supplies and services," said Craig Smith, president/CEO of Owens & Minor. "We believe that Liberty will continue our tradition of providing exceptional service to the patients served by this business."

The transaction is expected to close in early January. Owens & Minor said it plans to provide additional information regarding the financial impact of the deal when it releases fourth quarter 2008 results in early February.

"This builds on Liberty's long and successful growth strategy by implementing multiple initiatives, including direct marketing and, as appropriate and opportunities allow, targeted acquisitions," said Laizer Kornwasser, Liberty's president.

Owens & Minor is a distributor of medical and surgical supplies and a healthcare supply-chain management company.

In other dealmaking activity:

• Nihon Kohden (Irvine, California) said it has agreed to acquire Neurotronics (Gainesville, Florida). Neurotronics becomes a subsidiary of Nihon Kohden on Wednesday.

Neurotronics sells a sleep data management suite of programs, including the sleep brain wave analysis program, Polysmith DMS.

Through the combined efforts of both companies, Nihon Kohden said it expects to increase worldwide sales in sleep and set a foundation for its long-term strategy in the sleep and neurodiagnostic fields, with the continuing goal of improving the quality of medical treatment.

• Emageon (Birmingham, Alabama) said it has received a letter from Health Systems Solutions (HSS; New York) indicating that Stanford International Bank Ltd. (SIBL) would not provide the funding to consummate the deal between the two companies at this time. The letter said that HSS is continuing to urge SIBL to fund the transaction and that HSS is undertaking further efforts to consummate the deal.

"We continue to seek to engage Health Systems and SIBL in a constructive dialogue towards the goal of closing as soon as possible," said Chuck Jett, Emageon CEO. "We are also hopeful that Health Systems will begin to take all such actions as required under the merger agreement to remedy the failure to finance the transaction and close promptly. Failure to remedy the financing promptly will require us to seek all remedies to enforce our rights for the benefit of our stockholders."

Last week Emageon said it had received a letter from HSS indicating that it was prepared to move forward to close the companies' pending merger. At that time, HSS also said that it had demanded that SIBL provide the funding to close the deal (Medical Device Daily, Dec. 24, 2008).

Emageon provides information technology systems for hospitals, healthcare networks and imaging facilities.

• Johnson & Johnson (J&J; New Brunswick, New Jersey) said that stockholders of Omrix Biopharmaceuticals (New York) tendered about 16,749,152 shares of Omrix common stock, including roughly 1,293,924 shares subject to guaranteed delivery procedures, representing nearly 97.8% of Omrix's outstanding common stock. According to J&J's tender offer, shares that were validly tendered and not withdrawn have been accepted for payment.

J&J said it intends to complete the acquisition of Omrix through what is known as a "short-form merger," that is, without a vote or meeting of Omrix's remaining stockholders. Each of the remaining shares of Omrix common stock (other than shares owned by stockholders of Omrix who properly exercised their appraisal rights under Delaware law) will be converted into the right to receive $25 a share, less any required withholding taxes, in cash and without interest, which is the same amount per share that was paid in the tender offer.

The merger is expected to occur as soon as practicable.

Following the merger, Omrix is expected to operate as a stand-alone entity reporting through Ethicon (Somerville, New Jersey), a J&J company, and Omrix's common stock will no longer list on Nasdaq.

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