A Diagnostics & Imaging Week

Inverness Medical Innovations (IMI; Waltham, Massachusetts) and BBI Holdings (Cardiff, UK) reported that they have reached agreement on a proposal for Inverness to acquire all of BBI’s outstanding share capital for as much as $149 million. BBI specializes in the development and manufacture of non-invasive lateral flow tests, or in vivo disagnostics, and has achieved a global reputation for manufacturing superior-quality gold reagents. BBI is quoted on the AIM market of the London Stock Exchange.

The acquisition, the ninth that Inverness has made or proposed this year, is expected to be implemented by way of a court-approved plan of arrangement under Section 425 of the UK Companies Act, whereby BBI would become a wholly-owned subsidiary of IMI.

Inverness would offer BBI shareholders 195 pence (about $3.95) per ordinary share, payable in IMI stock, with an option to select a cash alternative at 185 pence (about $3.75) a share.

The acquisition is conditioned on court approval of the plan and a favorable vote by BBI shareholders.

The deal is worth just under $149 million if all remaining BBI shares were purchased with Inverness stock, while an all-cash deal would be worth $141.4 million.

Of the total 42,917,735 issued and outstanding BBI shares, 5,208,333 shares already are held by a subsidiary of IMI. In addition, BBI employees also have options to purchase 5,303,349 shares. Inverness said it intends to offer each option holder the opportunity to exchange his or her existing BBI options for a new IMI option with the equivalent market value.

Commenting on the proposed transaction, Ron Zwanziger, CEO of Inverness said, “We have had a long and positive relationship with BBI, and IMI strongly believes that their capabilities in developing novel lateral flow based rapid diagnostic products and in developing and manufacturing high performance reagents and biological materials for use in those products would greatly complement our existing business.”

IMI has been highly acquisitive this year. In November it reported that it completed its $165 million acquisition of HemoSense (San Jose, California), a developer of point-of-care testing products for therapeutic drug monitoring.

In October, the company agreed to buy Alere Medical (Reno, Nevada) for $302 million, consisting of about $125 million in cash and $177 million in IMI common stock.

Earlier in October the company said it would acquire all the shares of Panbio (Brisbane, Australia) for 65 cents a share in cash. The proposal values the issued share capital of Panbio at about A$41 ($37 million). Panbio develops diagnostic tests, including those used in the diagnosis of flaviviruses and other arthropod-borne viruses, selling worldwide.

That deal was reported just a few days after the company said it had acquired UK-based Bio-Stat Healthcare Group, a distributor of both core laboratory and point-of-care diagnostic testing products to the UK market place, for about $33.4 million. In addition, Inverness said it would pay an earn-out up to about $14.6 million based on BioStat’s 2007 results.

Other acquisitions Inverness has reported this year include Cholestech (Hayward, California), a maker of rapid diagnostic products, which it completed in September for $326.3 million and first disclosed in June Maritech (Newton, Massachusetts), a developer of protein-based diagnostics, for about $36 million; and Biosite (San Diego) for $92.50 a share, beating out rival Beckman Coulter (Fullerton, California).

In other dealmaking news:

• Volcano (San Diego), a provider of intravascular ultrasound (IVUS) and functional measurement (FM) products designed to enhance the diagnosis and treatment of vascular and structural heart disease, said it has reached a definitive agreement to acquire CardioSpectra (San Antonio), a privately-held company developing optical coherence tomography (OCT) technology, for $25 million in cash.

Volcano said CardioSpectra’s unique OCT imaging system is expected to complement its existing product offerings and will further enhance Volcano’s position as an imaging technology leader in the field of interventional medicine.

Volcano will pay $25 million in cash at closing, which is expected to occur by the end of the year. In addition, it may make additional payments based on the achievement of certain product development, regulatory and revenue milestones. Any future payments may be made in cash or stock or a combination of both at Volcano’s discretion.

• Caris Diagnostics (Irving, Texas) reported an agreement to combine with Molecular Profiling Institute (MPI; Phoenix) and its subsidiary, the Tissue Banking and Analysis Center, a CLIA-certified molecular diagnostics company focused on the development of molecular diagnostic tests based on genomic and proteomic profiling.

MPI provides testing facilities, prognostic testing services, and resources for genomic and proteomic profiling to help guide physicians in the treatment of cancer and other complex diseases. Through its Tissue Banking and Analysis Center, MPI also offers biospecimen procurement, storage, tracking, analysis, and reporting for research institutes, pharmaceutical and diagnostic companies, and medical centers.

Caris provides surgical pathology services to physicians who treat patients in an ambulatory setting.

• U.S. HealthWorks Medical Group (Valencia, California) reported the acquisition of Inland Industrial Medical Group (Ontario, California).

Both companies offer employers comprehensive occupational healthcare, including injury and illness diagnosis and treatment, pre-placement and post-offer physical exams, drug and alcohol testing, physical therapy and orthopedic services.

Financial terms of the deal were not disclosed.

U.S. HealthWorks now operates 59 occupational medical centers in California.