Volcano (San Diego) has agreed to pay about $21.5 million in cash to acquire Axsun Technologies (Boston), a private company that makes lasers and optical engines used in optical coherence tomography (OCT) imaging systems and advanced photonic components and subsystems used in other industrial applications.
The deal is expected to close next week, with Axsun operating as a subsidiary of Volcano.
Axsun has development partnerships with companies serving the cardiology and dental markets and said that it expects the launch of the first medical imaging systems using its technology during the first half of 2009. Volcano said it plans to use new integrated versions of Axsun's advanced tunable laser and optical engine technology in the development of new OCT imaging systems.
Axsun also offers devices for industrial applications and the telecommunications network sector. The company reports having more than 90 U.S. patents issued, another 40 pending, and about 85 employees. It recorded 2007 revenues from operations in excess of $18 million.
Scott Huennekens, president/CEO of Volcano, said that Axsun "is another complementary and important transaction for Volcano as it provides us proprietary OCT technology that we believe will both accelerate our OCT product development efforts and provide us significant and sustainable competitive advantages in the invasive imaging arena. We believe OCT technology will extend Volcano's reach to clinical indications and research opportunities that represent sizeable market opportunities ... beyond those served by our current offerings."
Volcano said it expects the transaction to be neutral to consolidated EPS in FY09 and that, with transaction close, it will have more than $145 million in cash, with no debt. The company said it would provide additional details on the financial impact of the deal in mid-February when it provides 2009 guidance during its 4Q earnings conference call.
According to Volcano, Axsun's technology and laser components allow for dramatic imaging performance improvements in equipment form factors as small as 1/1,000th the size of current laser components, at very low manufacturing costs.
"The Axsun laser and optical engine technology is a key building block in our strategy to cement our already strong position in invasive imaging," Huennekens said. "The company's core technologies are truly leading-edge and will advance our programs to both enhance system performance and achieve lower manufacturing costs ... ."
He said that Axsun's technology "has the potential to expand OCT applications into a number of new platforms serving large markets in the healthcare sector, including peripheral vascular, neurovascular, cancer and ophthalmology."
Volcano develops systems used to facilitate endovascular procedures, enhance the diagnosis of vascular and structural heart disease and guide therapies.
Dale Flanders, president/CEO of Axsun, said the company is "thrilled" to become a part of Volcano.
"It is clear that medical imaging represents one of the largest growth markets in which to fully exploit this technology," Flanders said. "Our capability of precise imaging is delivered with a level of performance and on a scale of miniaturization and at a cost that should enable significant expansion of varied market opportunities in a number of medical specialties.
"We are also pleased to merge with a company with the resources and managerial strength of Volcano to help us build on our leadership position in the communications and industrial spectroscopy markets."
In other dealmaking activity:
• Emageon (Birmingham, Alabama) reported receiving a letter Monday evening from Health Systems Solutions (HSS; New York) indicating that it is prepared to move forward to close the companies' pending merger.
HSS also indicated, Emageon said, that it had demanded that Standford International Bank Limited (SIBL) provide the funding to consummate the deal yesterday. Emageon said it had not yet received notice of SIBL's response to this request.
HSS said it "continues to communicate with SIBL and urge it to fund the transaction," but that it can "neither guarantee that Stanford will ultimately fund or that alternative sources of financing will be available."
Emageon had reported earlier this week that it had demanded a closing of the merger with HSS (Medical Device Daily, Dec. 23, 2008). Emageon provides information technology systems for hospitals, healthcare networks and imaging facilities.
• Johnson & Johnson (J&J; New Brunswick, New Jersey) said it has acquired LGE Performance Systems (Orlando, Florida), known as Human Performance Institute, which develops training programs to improve employee productivity.
J&J said the acquired company would operate within its Wellness & Prevention business platform. Financial terms were not disclosed.
• Pressure BioSciences (PBI; South Eaton, Massachusetts) reported an exclusive patent liscense agreement with the Battelle Memorial Institute (Columbus, Ohio).
The company said the patent application describes a method and a system for improving the analysis of protein samples, including through an automated, in-line system utilizing pressure and a pre-selected agent to obtain a digested sample in a shorter period of time than current methods, while maintaining the integrity of the sample throughout the preparatory process.
The company said that the claims in the patent will build upon and broaden its own existing IP position in using pressure cycling technology (PCT) to enhance the quality and significantly decrease the processing time for protein analysis, an area of particular importance for many laboratories worldwide.
PBI said the "novel aspect" of the Battelle invention, when combined with the advantages of PCT, offers the possibility of a straightforward approach to the automation of sample preparation techniques and may lead to the development of instrumentation to be integrated with high-performance liquid chromatography and mass spectrometry equipment.
• Thermage (Hayward, California) reported closing the acquisition of Reliant Technologies (Mountain View, California). The deal brings together two of the leading brands in skin tightening and skin resurfacing and rejuvenation, according to the company.
Thermage bought Reliant for roughly $25 million in cash, 23.6 million shares of Thermage common stock, and assumption of up to $7 million in debt.
• Isis Pharmaceuticals (Carlsbad, California) and Abbott Laboratories(Abbott Park, Illinois) reported receiving Hart-Scott-Rodino anti-trust clearance for Abbott's purchase of the remaining equity ownership in Ibis Biosciences, an Isis subsidiary, a key condition to Abbott's acquisition of it.
Last week, Abbott exercised its option to purchase Ibis. Closing of the acquisition, subject to the satisfaction the terms conditions of a stock purchase agreement between the parties, is expected to occur in January.
Ibis sells the Ibis T5000 Biosensor System for rapid identification and characterization of infectious agents, for research use only. Accrding to the company, it is capable of identifying virtually all bacteria, viruses and fungi, and can provide information about drug resistance, virulence and strain type of these pathogens across a range of applications.