A Diagnostics & Imaging Week

GE Healthcare (Chalfont St. Giles, UK) said it has agreed to acquire Vital Signs (Totowa, New Jersey) in a deal valued at roughly $860 million. Shareholders of Vital Signs will receive $74.50 a share in cash.

Vital Signs provides products applicable to a wide range of care areas including anesthesia, respiratory, sleep therapy and emergency medicine. Vital Signs says its single-patient use products offer significant cost advantages and improved patient care features, including reducing the potential of transmitting infections from one patient to another.

The company will become part of GE's Clinical Systems business, a provider of advanced technologies for patient monitoring, anesthesia delivery and acute respiratory care.

"This acquisition is consistent with GE's strategy to invest in high-technology, innovative businesses that deliver top-line growth, earnings expansion and expanded margins," said John Dineen, president/CEO of GE Healthcare. "Vital Signs has consistently grown at double-digit rates while generating strong operating margins. Its products are a great complement to our existing anesthesia, monitoring and respiratory offerings."

"This is a tremendous opportunity for us to further develop the Vital Signs business," said Terry Wall, CEO of Vital Signs. "We are proud of our innovative single patient use technologies and the contribution they have made to reduce patient mortality through limiting hospital acquired infections. By joining GE Healthcare, we see a huge opportunity to bring these products to many more hospitals and improve the care and health of patients worldwide."

The deal, which is subject to Vital Signs' shareholder and regulatory approvals, is expected to close in 4Q08. The boards of both companies have approved the transaction. Shareholders holding about 37% of Vital Signs' outstanding common stock have agreed, among other things, to vote their shares in favor of the acquisition.

"Vital Signs has an outstanding track record as a product innovator, with a well-earned reputation for supplying quality products," said Omar Ishrak, president/CEO of GE's Clinical Systems business. "Vital Signs' product offerings are highly complementary with our Clinical Systems business. We believe that combining the skills and knowledge of the two companies will create significant added value for our customers, bringing new technologies to healthcare professionals worldwide. Clinical Systems is a key area of growth for GE Healthcare and expanding our skill base and product offering in this area supports our vision of helping clinicians and nurses deliver the best possible care to their patients."

In other dealmaking activity:

Hologic (Bedford, Massachusetts) reported that its subsidiary, Thunder Tech, has completed its tender offer for all outstanding shares of Third Wave Technologies (Madison, Wisconsin) for $11.25 a share in cash.

About 47,968,050 shares were validly tendered and not withdrawn in the offer, representing roughly 95.8% of Third Wave's issued and outstanding shares. All validly tendered shares were accepted for payment.

Hologic is in the process of completing the acquisition of Third Wave though a short form merger in which Third Wave will become a subsidiary of Hologic. In the short form merger all outstanding shares of Third Wave not purchased in the tender offer, and not held by a holder who demands appraisal rights for such shares, will be converted into the right to receive $11.25 a share in cash.

Hologic makes premium diagnostics, medical imaging systems and surgical products for the healthcare needs of women.

Third Wave develops molecular diagnostic reagents for a variety of DNA and RNA analysis applications to meet the needs of its customers.

Roche (Basel, Switzerland) and Arius Research (Toronto) reported signing a definitive agreement for Roche to acquire Arius in an all-cash transaction at a price of nearly $191 million.

Arius is the developer of a proprietary antibody platform called FunctionFIRST which rapidly identifies and selects antibodies based on their functional ability to affect disease before progressing into clinical development. The FunctionFirst platform will allow Roche to further strengthen its developmental portfolio, initially within the areas of oncology and inflammatory diseases where this new technique offers potentially broad therapeutic applications.

"Arius' promising platform and early pipeline of new antibody candidates represent an excellent fit with our own progressing research in the fields of cancer and immunology," said Lee Babiss, head of global research at Roche. "The FunctionFirst approach provides us with a large library of antibodies from which we can identify the best new drug candidates for the development of clinically differentiated medicines."

Roche will pay C$2.44 for each common share of Arius. This price represents a 15% premium to the closing price on July 22, 2008 and a 44% premium to the 20-day volume-weighted average closing price. Roche will also acquire all of the issued and outstanding warrants of Arius. Roche will pay C$1.44 for each Class F warrant and C$1.78 for each Class G warrant.

Roche made ripples earlier this week when it offered Genentech (South San Francisco, California) a proposal to acquire all of the outstanding shares of Genetech's stock, not already owned by Roche, at a price of $89 in cash a share.

Aquilo Partners, Reedland Capital Partners and Dundee Securities acted as financial advisors to Arius in connection with this transaction.

Arius is focused on discovering and developing the next wave of antibody therapeutics to treat cancer and other diseases. Roche is a research-focused healthcare group that develops products in the fields of pharmaceuticals and diagnostics.

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