Theragenics (Buford, Georgia) said it would pay $47.8 million in cash for NeedleTech Products (Attleboro, Massachusetts), a private manufacturer of specialty needles and related devices. The deal is expected to close in the third quarter.

As M. Christine Jacobs, CEO and chairman of Theragenics, told investors during yesterday's conference call to discuss the deal, NeedleTech will be the company's third acquisition since May 2005. That means, she said, that with the acquisition of NeedleTech, Theragenics will have invested more than $100 million over three years.

"This bucks the current trend, especially for smaller companies like ours," Jacobs said.

In August 2006 Theragenics bought Galt Medical (Garland, Texas) in a $31.9 million cash and stock deal (Medical Device Daily, Aug. 4, 2006). Before that deal, the company acquired CP Medical (Portland, Oregon) in a cash and stock deal valued at about $25.4 million (MDD, May 10, 2005).

"Thus far, each acquisition has delivered us promise, each has grown, been profitable, contributed to cash flow, and diversified the company," Jacobs said. "We've set the bar pretty high with our previous acquisitions, but we expect more of the same with NeedleTech."

With revenue of $16.9 million in 2007, NeedleTech's products include coaxial needles, biopsy needles, access trocars, brachytherapy needles, guidewire introducer needles, spinal needles, disposable veress needles, and other needle-based products. End markets served include the cardiology, orthopedic, pain management, endoscopy, spine, urology, and veterinary markets, the company said.

"The acquisition of NeedleTech will provide us with another bucket of assets that greatly enhances our abilities as a supplier to the larger player in the spaces we serve," Jacobs said.

NeedleTech's customer list includes many of the customers that Theragenics is not currently selling to, Jacobs said, which will help the company expand its customer base.

"Our intent is to provide high-quality, made-in-the-USA products and systems to the large medical device companies," Jacobs said. "We do not want to compete directly with these companies, rather we want to supply the products and systems that they need to support their high-end, more complex procedures and devices."

Theragenics CFO Frank Tarallo told investors during the call that the company will retain NeedleTech's cash and investments, which totaled about $5 million as of June 30. NeedleTech has about 150 employees and two manufacturing facilities, he added.

He said the worldwide market for special purpose needles was estimated at $2.3 billion in 2006 and is forecast to grow to $2.7 billion by 2010. The U.S. is the largest market for special purpose needles, he said, estimated to be at $828 million and projected to reach about $1 billion by 2010. NeedleTech's products address about 10% of these markets, Tarallo said.

Theragenics expects to finance $24.5 million of the purchase price with borrowings under its existing $40 million credit facility, he said, and the remainder will come from the company's current cash and investments. These borrowings will bring Theragenics' total outstanding borrowings under its current credit facility to $32 million.

"This is a very difficult market [in which] to arrange financing for deals. We believe it is telling that our lender continues to support our strategy through the use of our credit facility," Tarallo said. "I think this speaks volumes to our strategy and execution."

Theragenics expects the acquisition to be dilutive to earnings per share in 2008 and accretive in 2009, he said.

"We are excited about becoming part of the Theragenics team," said Ron Routhier, president of NeedleTech. "We are impressed with how they have integrated their previous acquisitions, and we are looking forward to the benefit of the resources and expertise they bring to the table. Theragenics' assets and resources should help us better serve our customers and accelerate our growth. NeedleTech's capabilities should also greatly enhance Theragenics' overall strategy of providing an array of high quality products to the large medical devices manufacturers."

Genesis Capital was the company's financial advisor, and Powell Goldstein was its legal advisor on this transaction.

Theragenics operates two business segments: its surgical products business and its brachytherapy seed business. Its surgical products business makes wound closure and vascular access products. The brachytherapy business makes its premier product, the palladium-103 TheraSeed device and I-Seed, an iodine-125 based device, which are used primarily in the minimally invasive treatment of localized prostate cancer.

In other dealmaking activity:

• Hologic (Bedford, Massachusetts) and Third Wave Technologies (Madison, Wisconsin) reported that the initial offering period of Hologic's tender offer for all outstanding shares of common stock of Third Wave has expired.

The depositary for the offer has advised Hologic that, as of the expiration of the initial offering period, roughly 45,225,950 Third Wave shares were validly tendered to Hologic's Thunder Tech subsidiary and not withdrawn, representing about 92.1% of the outstanding common stock of Third Wave. Thunder Tech has accepted for payment all Third Wave shares that were validly tendered during the initial offering period.

Hologic also said that Thunder Tech has begun a subsequent offering period for all remaining shares of Third Wave common stock to allow stockholders who have not yet tendered their shares the opportunity to do so. This subsequent offering period will expire at midnight EST on July 23, unless further extended.

The same $11.25-a-share price offered in the prior offering period will be paid during the subsequent offering period, the company said.

Hologic said it expects to merge Thunder Tech into Third Wave. Thunder Tech will acquire all other Third Wave shares at the same $11.25 a share price, without interest and less any required withholding taxes, that was paid in the tender offer. Third Wave will become a subsidiary of Hologic.

Hologic develops diagnostics, medical imaging systems and surgical products dedicated to serving 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.

• Thermo Fisher Scientific (Waltham, Massachusetts) said it has acquired Affinity BioReagents (Golden, Colorado), a provider of antibodies, peptides, proteins and other reagents for life science research.

Affinity BioReagents has an offering of more than 35,000 reagents primarily monoclonal and polyclonal antibodies that are used in numerous fields of medical and academic research, as well as drug discovery. The company also provides recombinant proteins and custom antibody-production services. Affinity BioReagents had annual revenues of about $6 million in 2007, and will be integrated into Thermo Fisher's Analytical Technologies Segment.

• McKesson (Alpharetta, Georgia) said it has acquired EN-Chart Scanning Program (Dandridge, Tennessee), a provider of computer-assisted facility coding and compliance solutions for emergency department visits.

McKesson's acquisition of EN-Chart is the culmination of a two-year business partnership in which McKesson has offered EN-Chart as Horizon Emergency Care Facility Coding.

McKesson provides pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients.