A Medical Device Daily
Natus Medical (San Carlos, California) reported that it has acquired the neurology business of privately held Schwarzer (Essen, Germany) in a cash transaction whose details were not publicly disclosed.
The neurology division of Schwarzer develops computer-based electrodiagnostic systems and disposable supplies used by medical practitioners to aid in the detection, diagnosis, and monitoring of neurologic disorders.
The acquisition was completed by way of an asset purchase under which Natus acquired the assets of the neurology division of Schwarzer, including all shares in MMT Muenchner Medizintechnik (Munich, Germany), a subsidiary of Schwarzer engaged in the distribution of neurology products.
Schwarzer Neurology expects revenue of about 14.8 million for its fiscal year ended June 30. In addition to the purchase price paid at closing, which was less than one times trailing 12-month revenue, an earnout provision of the purchase agreement could result in additional cash consideration to Schwarzer based on the future performance of the Schwarzer Neurology division.
Other terms of the transaction were not disclosed.
"With this acquisition, we believe we now have a market-leading position for diagnostic neurology systems in the German-speaking regions of Europe," said Jim Hawkins, president/CEO of Natus. "Schwarzer Neurology adds to our growth opportunities by broadening our product offerings in the EEG market and allows us to further leverage our international distribution organization, bringing Natus another step closer to achieving our stated goal of growing revenue to a $250 million annual run rate by the end of 2008."
Natus said it expects the acquisition to be accretive to earnings during 2008, excluding any one-time acquisition-related charges.
Natus is a provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and newborn care.
Misonix (Farmingdale, New York), a developer of minimally invasive ultrasonic device technology, which in Europe is used for the ablation of cancer and worldwide for other acute health conditions, reported that it has closed a transaction with USHIFU (Charlotte, North Carolina).
Pursuant to the terms of an agreement previously entered into, Misonix sold its equity position in Focus Surgery (FSI; Indianapolis) to USHIFU and was paid one-half of the amount of its outstanding debt plus interest owed to Misonix by Focus, with the remaining piece to be paid in 18 months.
Misonix received about $679,000, which represents one-half of the outstanding debt plus interest and about $837,000 for the company's 2,500 shares of Series M preferred stock of Focus.
"We have determined that it is in the best interest of Misonix to take advantage of this opportunity to liquidate our investment in FSI," said Michael McManus, president/CEO of Misonix. "It is very important to recognize that Misonix will maintain all of its present rights to manufacture the SB500 for prostate cancer for FSI, to distribute the SB500 for prostate cancer in Europe and Eastern Europe and to build upon the FSI technology to develop, market and sell products using high-intensity focused ultrasound technology throughout the world."
McManus also said that USHIFU will make available to Misonix the use all of its new developments in HIFU in those areas where Misonix has worldwide rights.
Focus is the creator and manufacturer of the Sonablate 500, an image-guided acoustic ablation device.
USHIFU is a healthcare development company and medical device distributor committed to creating a new standard for prostate cancer treatment with HIFU therapy.
In other dealmaking news:
• St. Jude Medical (St. Paul, Minnesota) reported that in connection with the previously disclosed acquisition of EP MedSystems (West Berlin, New Jersey), the final exchange ratio is 0.0738 (rounded) for the stock portion of the consideration.
As previously reported, under the terms of the agreement, EP MedSystems shareholders will receive either $3 in cash or about $3 of St. Jude common stock (as provided in the merger agreement) for each EP share they own for a total of about $92.1 million (Medical Device Daily, April 10, 2008). EP shareholders have the option to elect between cash and shares, subject to proration such that St. Jude Medical will issue at least 40% of the total merger consideration in its common stock and up to 60% in cash.
The exchange ratio for the stock portion of the consideration is a fraction: with the numerator of $3 and the denominator of $40.67, which is the average closing price of St. Jude common stock over 10 consecutive trading days ending on and including July 1, the second trading day prior to the anticipated closing date of the acquisition.
As previously reported, the election deadline was 5 p.m. EDT, July 1.
EP MedSystems develops a line of products for use in the cardiac rhythm management or electrophysiology market which are used for visualization, diagnosis and treatment of cardiac rhythm disorders.
• Emeritus (Seattle), a national provider of assisted living and related services to senior citizens, reported that it has closed on the first phase of the previously announced purchase of 29 communities from Health Care REIT (Toledo, Ohio) and affiliates.
The communities were formerly operated by the company under long-term leases. This first phase closing consists of 19 communities with a capacity of 1,564 units for a purchase price of $222.7 million, excluding closing costs and loan fees.
Financing for this first phase consists of $163.2 million of mortgage debt at a fixed rate of 6.65% originated by Key Bank through a Freddie Mac credit facility, a $50 million note from HCN with a fixed rate of 8%, increasing on each anniversary date by 25 basis points, and the balance from Emeritus cash on hand.
The Freddie Mac credit facility has a term of 10 years, with interest-only payments for the first year and, thereafter, interest and principal payments based on a 30-year amortization schedule. The HCN note has a term of three years, with interest-only payments over the three-year term.
The company currently accounts for 18 of the 19 properties as capital leases. The acquisition of these 19 communities increases the company's owned portfolio to 149, or 58.4% of the total consolidated portfolio.
Emeritus is a national provider of assisted living and Alzheimer's and related dementia care services to seniors.
In the wake of the previously disclosed unsolicited $2.25 a share offer by Tang Capital Partners, Northstar Neuroscience (Seattle) reported that its board has engaged Leerink Swann to assist in the evaluation of strategic alternatives (MDD, July 3, 2008).
Northstar is focused on developing neurostimulation therapies to treat neurological injury, disorder, and disease. Its Renova cortical stimulation system is an investigational device that delivers targeted electrical stimulation to the outer surface of the brain - the cerebral cortex.