A Medical Device Daily
Diomed Holdings (Andover, Massachusetts) developer of the EVLT laser treatment for varicose veins, reported that it has entered into an asset purchase agreement with AngioDynamics (Queensbury, New York) for the sale of Diomed's U.S. operations for a cash purchase price of $8 million.
The assets subject to the agreement exclude the proceeds of Diomed's settlement of its '777 patent litigation with AngioDynamics, under which AngioDynamics agreed to pay $7 million, and the proceeds of Diomed's anticipated $3.6 million settlement with Vascular Solutions (Minneapolis) now pending bankruptcy court approval, as well as certain patents.
Diomed filed an action against AngioDynamics and Vascular Solutions in 2004 (Medical Device Daily, March 8, 2004).
On March 14, Diomed filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Massachusetts, Western Division. Since that time, Diomed has been operating as a debtor-in-possession while pursuing the sale of its U.S. operating assets. Diomed said it expects to complete the asset sale to AngioDynamics within about 60 to 90 days and to sell its remaining assets in due course, subject to the approval of the bankruptcy court.
AngioDynamics has also agreed to pay $3 million in cash for certain of the assets of Diomed Ltd, the UK subsidiary of Diomed, which filed for insolvency administration under the laws of the UK contemporaneously with Diomed's bankruptcy filing in the U.S.
The closing of AngioDynamics' agreement with Diomed is conditioned upon AngioDynamics' acquisition of Diomed Ltd's assets and is subject to, among other conditions, court approval and an auction process administered by the courts, under which other interested parties may present competing offers.
The purchase agreement contemplates that Diomed will use its existing cash, receivables and ongoing revenues to fund its operations while it operates under Chapter 11, and, if necessary, may include up to $1.3 million in debtor-in-possession financing from AngioDynamics.
"If we are successful with our offers, we will strengthen our presence in the growing market to treat varicose veins as well as expand our sales organization in both the United States and overseas," said Eamonn Hobbs, president/CEO of AngioDynamics. "Our plan is to incorporate the Diomed sales team in both the United States and in Europe into the AngioDynamics organization and to offer employment to many of the other Diomed employees."
"We believe that AngioDynamics' acquisition of Diomed's business provides our loyal physician partners the best opportunity for a continuation of superior customer service, an expanded flow of new and innovative technologies, and continuity of laser and disposable product supply," said James Wylie, Jr., Diomed's CEO."
In other dealmaking news:
• Opto Circuits (Bangalore, India) reported that it has completed its previously disclosed $68 million acquisition of Criticare Systems (Waukesha, Wisconsin) (Medical Device Daily, Feb. 26, 2008).
Opto Circuits had previously acquired about 92.8% of the outstanding shares of Criticare common stock for a purchase price of $5.50 per share in cash and without interest. As the final step of the acquisition, Opto Circuits purchasing subsidiary merged with and into Criticare effective April 10.
Opto Circuits is a developer of digital thermometers, sensors, probes, pulse oximeters, patient monitoring systems, cardiac stents and catheters. Criticare makes patient monitoring systems and noninvasive sensors for a range of hospitals and alternate healthcare environments.
• The TriZetto Group (Newport Beach, California) said it has agreed to be acquired and taken private by funds advised by Apax Partners, a growth-focused, global private equity firm with $35 billion in funds under advice and what it said was "significant expertise" in healthcare and technology.
TriZetto provides information technology solutions that enable payers and other constituents in the healthcare supply chain to improve the coordination of benefits and care for healthcare consumers.
TriZetto shareholders will receive $22 a share in cash, a 29% premium over the 30 calendar-day average closing price of the company's stock. The transaction is valued at about $1.4 billion, including consideration for stock options and shares related to TriZetto's outstanding convertible notes. BlueCross BlueShield of Tennessee and The Regence Group, both customers of TriZetto, are providing a portion of the funding and will be equity investors in the newly private company.
The company said it does not anticipate any material changes in its product offerings, staffing or facility locations as a result of this change in ownership.
RBC Capital Markets is the exclusive debt underwriter on the deal. Deutsche Bank Securities acted as the exclusive financial advisor to Apax Partners. BlueCross BlueShield of Tennessee and Regence were advised by Cain Brothers and Co. UBS Investment Bank served as the exclusive financial advisor to TriZetto.