A Medical Device Daily

Inverness Medical Innovations (IMI; Waltham, Massachusetts) reported that it has finalized its $36 million acquisition of Matritech (Newton, Massachusetts), that deal first disclosed in late August (Medical Device Daily, Aug. 29, 2007).

The deal was structured as an asset purchase under which a newly formed subsidiary of IMI acquired substantially all of the assets of Matritech for 616,713 shares of IMI common stock, valued at about $36 million.

In addition, IMI has agreed to pay Matritech up to $2 million of incremental consideration in cash and/or IMI common stock, conditioned on the achievement of certain revenue targets for the upcoming 12-month period.

Matritech is a developer of protein-based diagnostic products for the early detection of cancer. It is using its patented proteomics technology to develop diagnostics for the detection of a variety of cancers.

The company’s first two products, the NMP22 Test Kit and NMP22 BladderChek Test, have been FDA-cleared for the monitoring and diagnosis of bladder cancer. The company has discovered other proteins associated with cervical, breast, prostate, and colon cancer.

OSI Systems (Hawthorne, California), a provider of electronic products for applications in the healthcare and security industries, reported that it has increased its ownership in Spacelabs Healthcare (Issaquah, Washington), listed on the London AIM Exchange, to more than 90%.

OSI said it intends, within the next 10 business days, to complete the purchase of the remaining minority shareholding of Spacelabs for about $15 million. As a result of the transaction, Spacelabs will be a wholly-owned subsidiary of OSI.

In October 2005, OSI listed the stock of Spacelabs on the London AIM Exchange, selling 20% of the shares to institutional investors and retaining 80% ownership. Through the offering, the company raised about $27 million net of expenses.

Spacelabs used the proceeds raised in that offering to repay about $22 million of its $57.3 million debt to OSI -- leaving a balance owed to OSI of about $35 million.

OSI originally acquired Spacelabs in March 2004 for a price of $57 million (MDD, March 24, 2004).

Spacelabs was previously a unit of Instrumentarium (Helsinki, Finland), which was acquired by GE Medical Systems (Waukesha, Wisconsin) in a $2 billion deal in October 2003.

To complete the acquisition of Instrumentarium, GE agreed with both U.S. and European regulatory agencies to divest Spacelabs’ business worldwide. As part of those agreements, GE committed to provide the acquirer of Spacelabs the rights to distribute and market certain GE products and accessories.

The mandated sale made it very much a buyers’ market, with the $57 million figure representing a fraction of the $140 million Instrumentarium paid for Spacelabs in July 2002.

Spacelabs is comprised of several healthcare businesses: patient monitoring, anesthesia, pulse oximetry, osteoporosis diagnostics, clinical trials and now cardiology.

In other dealmaking news:

• Genstar Capital a middle-market private equity firm focused on investments in selected segments of the life sciences and healthcare services, industrial technology, business services and software services, reported that it has completed its previously disclosed $797 million acquisition of PRA International (Reston, Virginia), a global clinical research organization.

“Our new status as a private company will enable our entire work force to be even more focused on attaining our common goal to provide outstanding clinical research trials for our clients,” said Terrance Bieker, CEO of PRA, who will continue in that role.

Stockholders of PRA approved the transaction at a special meeting held on Dec. 12. They will receive $30.50 a share in cash for each share of common stock. The merger was first disclosed in July.

The company’s common stock was delisted from the Nasdaq yesterday.

Credit Suisse Securities (USA) acted as financial advisor to the PRA special committee. Dewey & LeBoeuf served as legal advisor to the special committee. UBS Investment Bank and Jefferies acted as financial advisors and Latham & Watkins as legal advisor to Genstar.

• SmartOps (Pittsburgh), a provider of enterprise-class supply chain optimization solutions, reported that Wyeth Pharmaceuticals (Madison, Wisconsin) has licensed its Enterprise Inventory Optimization (EIO) software solution. Financial terms of the licensing were not disclosed.

SmartOps says that EIO is designed “to enable customers to achieve both a rapid return on investment and a long-term competitive advantage by determining the best possible inventory and product availability plans given aggressive customer service goals and inherent uncertainties, time-varying data, multi-location and inventory stage complexities.”

SmartOps says its solutions have improved supply chain performance at companies in discrete manufacturing, consumer durables and packaged goods, technology, pharmaceutical manufacturing, distribution and retail industries.