A Medical Device Daily
Nordic Capital and Avista Capital Partners reported completing the $4.1 billion acquisition of ConvaTec (Skillman, New Jersey), a maker of wound therapeutics and ostomy care products, from Bristol-Myers Squibb (BMS; New York). The deal was first disclosed in May (Medical Device Daily, May 6, 2008).
David Johnson will remain CEO of ConvaTec, supported by current ConvaTec management.
"This is an incredible day for ConvaTec, as we embark as a stand-alone company and continue our trajectory of growth," said Johnson. "Nordic Capital and Avista Capital Partners share a common vision for the future of ConvaTec. With their support, we are well positioned for a new phase of accelerated growth, innovation and development ... ."
Nordic Capital and Avista Capital previously have said they plan to integrate Unomedical (Copenhagen, Denmark), a manufacturer of single-use medical devices, into the ConvaTec business within the next few months. "By bringing together Unomedical and ConvaTec, the combined company will be better positioned to realize its growth potential. The solutions the company will be able to offer to their customers will increase substantially as these two product portfolios come together," said David Burgstahler, Partner, Avista Capital Partners.
The combined company, named ConvaTec, will be a global provider in its four key product sectors: wound therapeutics, ostomy care, critical care and infusion devices, with combined estimated revenues of $1.6 billion. The integration does not include Unomedical's wound care division. It will be divested by Nordic Capital within the next six months, as required by the European Competition Commission on July 15,
Current brands within the ConvaTec portfolio include its wound dressing, Aquacel Ag, and the recently-launched Versiva XC gelling foam dressing, both featuring the company's Hydrofiber technology; and what ConvaTec calls its "category-leading device," the Flexi-Seal fecal management system for critical care, and the ConvaTec Moldable Technology for ostomy care.
BMS is spinning off Convatec as part of its plan to focus on biopharmaceuticals.
Late last year, BMS said it would cut nearly 4,300 jobs worldwide, one-tenth of its workforce, close more than half its manufacturing plants by 2010, and explore selling two divisions, ConvaTec and also Mead Johnson Nutritionals (Evansville, Indiana) business (MDD, Dec. 7, 2007).
Like other big pharmas, BMS faced increased competition from generic drug makers as patents expire. Others forced to make similar large-scale cuts include Pfizer (New York) and Johnson & Johnson (New Brunswick, New Jersey) (MDD, Aug. 1, 2007).
Citigroup Global Markets and Morgan Stanley & Company served as financial advisors for BMS, and Cravath, Swaine & Moore served as its legal counsel.
Bear, Stearns International Limited acted as financial advisor for Nordic Capital and Avista Capital; JPMorgan acted as global coordinator in connection with the debt financing; and White & Case served as legal counsel to Nordic and Avista.
Bioheart (Sunrise, Florida) reported that it has agreed to acquire Medicalgorithmics (Warsaw, Poland) and the rights to that company's PocketECG, a real-time wireless beat-to-beat, heart monitor system for long-term, fully-automated ECG arrhythmia analysis. The device recently received CE mark approval for European marketing.
Terms of the transaction were not disclosed; the companies said they will conduct their due diligence reviews within the next 60-90 days.
"Similar in size to an MP3 player, patients find the PocketECG easy to use 24-hours-per-day in the comfort of their homes and when going about their normal activities," said Dr. Marek Dziubinski, co-founder and CTO at Medicalgorithmics.
The device connects to the patient via electrodes and wirelessly transmits data in real time 24-hours-a-day directly to the physician or a monitoring center for long-term monitoring over a period of days or weeks. Like other companies it this sector, the company says the intent is to reduce emergency hospital stays, improve care and reduce costs.
"We believe the merger of these two companies would create important synergies in the diagnosis, monitoring and potential treatment of heart failure patients, specifically in the area of arrhythmias and A-Fib," said Howard Leonhardt, CEO/CTO and chairman of Bioheart. "The monitoring and management of patients experiencing arrhythmias and A-Fib represents one of the fastest-growing segments of the treatment market."
In other dealmaking, Iomai (Gaithersburg, Maryland) reported stockholder approval of its previously disclosed merger with a subsidiary of Intercell (Vienna). About 71.6% of Iomai's outstanding shares entitled to vote at a special meeting approved the merger, representing about 99.9% of votes cast.
The transaction, valued at about $189 million (1122 million) or about $6.60 a share, was first disclosed in May.
Iomai's public shareholders, representing about 59% of Iomai's outstanding common stock will receive cash. Certain of Iomai's largest shareholders (and their affiliates), together representing about 41% of Iomai's outstanding common stock, agreed to exchange their shares for Intercell stock at an exchange ratio corresponding to a value of $6.60 a share of Iomai common stock upon closing.
Assuming satisfaction of all conditions, the transaction is slated for completion on or about Aug. 5.