A Medical Device Daily
Gen-Probe (San Diego) reported that the company does not intend to increase the value of its conditional tender offer to acquire Innogenetics (Ghent, Belgium), a molecular diagnostics company, in the wake of a higher offer by a rival suitor.
Its rival in the bidding war, drugmaker Solvay (Brussels, Belgium), increased its bid for to €6.50 ($10.22) a share in cash.
"We believe the disciplined analytical process we used to value Innogenetics resulted in a full and fair offer, and a higher bid therefore does not make financial sense for us," said Hank Nordhoff, Gen-Probe CEO/chairman. "Our existing clinical diagnostics and blood screening businesses remain healthy year-to-date, and we continue to focus on growing them in the United States and internationally."
Gen-Probe launched a bid for Innogenetics a month ago, offering €6.10 a share to make itself the world's largest standalone molecular diagnosis company.
Solvay had originally offered €5.75 a share in April.
Gen-Probe said on Wednesday that it did not intend to increase its offer.
Solvay said the transaction value was €200.7 million for Innogenetics' shares, but it would also be buying warrants and convertible bonds.
Solvay's takeover offer was conditional on it acquiring 75% of Innogenetics and on its target not recording a loss exceeding €10 million. It had already obtained regulatory clearance.
It added that reference shareholders with 18.48% of the shares remained committed to selling their stakes to Solvay.
Solvay said it expects to close the deal in the second half of 2008.
Gen-Probe is a maker of nucleic acid tests (NATs) that are used primarily to diagnose human diseases and screen donated human blood.
In other dealmaking news:
• Uluru (Addision, Texas) reported that it has signed a definitive agreement to acquire Bio Med Sciences (Allentown, Pennsylvania) for $10 million, subject to adjustment based on revenue targets.
Bio Med is a privately-held specialty wound care, burn care and scar management company with an established presence with burn specialists and plastic surgeons.
The purchase price will be paid in two installments, $7 million at closing and $3 million 6 months after closing. At the election of the company, up to $3 million of the purchase price can be paid in company common stock.
The company said it plans to fund the acquisition through internally generated funds supported by revolving and term debt. The closing of the acquisition is subject to customary closing conditions, including shareholder approval by Bio Med. Uluru said Bio Med is a profitable company and the acquisition will be immediately accretive to its consolidated earnings.
Bio Med has a range of wound, burn care and scar management products developed from its patented Silon film technology. The patents covering this technology extend beyond 2020. It has a well recognized presence in the burn care market where their scar management product line has a market leadership position.
"This acquisition will give us additional resources to more rapidly penetrate the burn and wound care markets with Altrazeal as Bio Med has extensive relationships in these markets and is a recognized and well respected company in this field," said Kerry Gray president/CEO of Uluru.
Mark Dillon, president/founder of Bio Med noted that the two companies have successfully worked together for more than seven years, developing and manufacturing OraDisc, "and given the focus of both companies, Uluru is an ideal merger partner."
• TomoTherapy (Madison, Wisconsin) reported that it has entered into a memorandum of understanding to acquire certain assets of Japan-based Hi-Art Co. relating to the sales and service of TomoTherapy's products in Japan. Hi-Art has distributed the TomoTherapy Hi Art treatment system in Japan since 2004.
Over the next several weeks, TomoTherapy and Hi-Art will negotiate a definitive purchase agreement. The transaction is expected to close in 4Q08, at which time the current distribution agreement will cease.
TomoTherapy makes the Hi Art treatment system, an advanced radiation therapy system for the treatment of a wide variety of cancers.
• Medical Properties Trust (MPT; Birmingham, Alabama) said it has made investments in five new hospital facilities for an aggregate of about $92.6 million.
The company entered into a $60 million financing arrangement with affiliates of Prime Healthcare Services (Chico, California) related to three southern California hospital campuses that Prime has acquired from Tenet Healthcare (Dallas). These hospitals are the 151-bed Encino campus of the Encino-Tarzana Medical Center, the 167-bed Garden Grove Hospital and Medical Center, and the 93-bed San Dimas Community Hospital. The financing, which provides for an initial rate of 10.5%, is expected to be converted into a sale/leaseback arrangement within 30 days with an identical initial rate and an initial term of 10 years.
In addition, MPT completed the acquisition of two inpatient rehabilitation hospitals leased to HealthSouth (HCP; also Birmingham) for about $32.6 million that are part of the previously disclosed acquisitions from HCP. The facilities that MPT acquired are the HealthSouth Mountain View Regional Rehabilitation Hospital in Morgantown, West Virginia, and the HealthSouth Rehabilitation Hospital of Petersburg in Virginia.
The investments were financed with proceeds from MPT's existing $220 million credit facility along with proceeds from a new $30 million term loan that was arranged by Key Bank.
The new term loan, which matures in November 2010, enables the company to terminate, without utilizing, the short-term bridge facility that was committed by a syndicate of banks in March 2008 in order to facilitate the HCP transactions. As a result, the company will incur about a $3.1 million charge in the second quarter to write-off costs associated with that facility. The new term loan also includes an accordion provision providing for an increase in size up to a total of $75 million.