A Medical Device Daily

Radiation Therapy Services (RTS; Fort Myers, Florida), which operates radiation treatment centers primarily under the name 21st Century Oncology, reported that the company has entered into an agreement to be purchased by Vestar Capital Partners (New York) for $32.50 a share plus assumed debt, for a deal valued at $1.1 billion.

RTS will be required to pay a $25 million termination fee to Vestar if the deal does not go through, based on regulatory filings.

The board of RTS has approved the agreement on the unanimous recommendation of a special committee of independent directors and recommends that its shareholders adopt the agreement.

Since its founding in 1983, RTS has created what it says is the nation’s largest radiation-focused operator of freestanding radiation treatment centers. The company provides a range of radiation therapy services to cancer patients. The company’s 83 treatment centers are in 27 markets in 16 states, including Arizona, California, Florida, and North Carolina.

“In Vestar, Radiation Therapy Services has found a true partner who shares our commitment to patients,” Dr. Daniel Dosoretz, CEO of Radiation Therapy Services, said. “Our mission is to create sophisticated treatment platforms to provide the best care for cancer patients. I can think of no better ownership structure for the company to help us focus on this mission.”

“Radiation Therapy Services leads the industry in its reputation, quality of patient care, professionalism of its staff, and strength of its management team,” said James Elrod Jr, managing director of Vestar.

Dosoretz, along with other members of management, own about 40% of the company’s fully diluted shares. They have pledged to vote their shares in favor of the transaction. The management team said it will reinvest a significant amount in the company and will hold an important equity position. In addition, a new management equity incentive program will be put in place to further involve the company’s leadership in the ongoing business.

The special committee, comprised of certain independent directors or RTS, issued the following statement:

“After a market check was conducted at the direction of the special committee and with the assistance of the company’s financial advisor, Wachovia Capital Markets, Radiation Therapy Services received an acquisition proposal from Vestar Capital Partners and, after extensive negotiations and careful consideration in conjunction with our financial advisor, Morgan Joseph & Co., the special committee has unanimously concluded that this transaction is in the best interest of our shareholders. This transaction will provide Radiation Therapy Services’ shareholders with a substantial cash premium over the current trading price of Radiation Therapy Services’ common stock.”

The transaction, subject to shareholder approval, is expected to close in 1Q08.

Wachovia Securities has committed to provide debt financing for the transaction. Morgan Joseph & Co. serves as financial advisor to the special committee and rendered an opinion to the committee as to the fairness, from a financial point of view, to RTS shareholders of the consideration to be received by those shareholders in the merger transaction, and Holland & Knight is serving as its legal counsel.

Shumaker, Loop & Kendrick is serving as legal counsel, and Wachovia Capital Markets is acting as financial advisor to RTS. Vestar was advised by Kirkland & Ellis and Kennedy Covington Lobdell & Hickman.

In other dealmaking news:

• Hologic (Bedford, Massachusetts) and Cytyc (Marlborough, Massachusetts) reported the completion of the combination of the two firms, creating one of the largest companies in the world focused on advanced technology for women’s health.

The companies first disclosed the $6.2 billion merger in May (Medical Device Daily, May 22, 2007).

Cytyc shareholders received 0.52 shares of Hologic common stock and $16.50 in cash for each share of Cytyc common stock held by them, with aggregate consideration paid to Cytyc shareholders totaling about $6.2 billion, payable in about 65.8 million shares of Hologic common stock and about $2.1 billion in cash. Hologic will continue to trade on the Nasdaq Global Select Market under the symbol HOLX while Cytyc will become a wholly-owned subsidiary of Hologic and its shares ceased trading on the Nasdaq as of the close of trading yesterday.

Also, Hologic reported Monday that Cytyc has initiated an offer to repurchase any and all of Cytyc’s outstanding 2.25% senior convertible notes due 2024.

The indenture governing the notes requires Cytyc to make the offer as a result of the merger. Cytyc is offering to purchase the notes for cash at a purchase price, per $1,000 principal amount, equal to 100% of the principal amount, together with $4.1875 per $1,000 principal amount, representing accrued and unpaid cash interest to, but excluding, Nov. 21, 2007. In the event that all of the outstanding notes are tendered in the tender offer, the aggregate purchase price required for Cytyc to purchase the tendered notes is estimated to be about $69.5 million. The tender offer for the notes will expire at 11:59 p.m., EDT, on Nov. 21, unless extended or earlier terminated. Cytyc expects to fund the tender offer with cash on hand.

As a result of the merger, each $1,000 principal amount of the notes is now convertible at the option of the holder at any time and from time to time into $556.11765 in cash and 17.526132 shares of Hologic common stock.

• Wright Medical Group (Arlington, Tennessee) reported acquiring certain assets of Metasurg (Houston, Texas), focused on development and marketing of surgical fixation and implant devices for foot and ankle surgery. The purchase consists of an initial payment of $2.5 million in cash and additional payments based upon future financial performance of the acquired assets.

Assets acquired are specific to Metasurg’s Bio-Arch subtalar implant, used in surgical treatment of flatfoot deformity. The implant is designed to provide improved patient tolerance vs. conventional designs, and can be inserted in a fast, accurate and minimally invasive manner, according to the company.

Wright said it will begin offering Bio-Arch products through its U.S. sales force immediately, with expansion into certain international markets in 2008.

“Wright’s vision is to become the ‘one-stop-shop’ for foot and ankle surgeons’ surgical needs, and providing comprehensive suites of products around specific pathologies is central to achieving this goal,” stated John Treace, VP of marketing for Wright’s biologic and extremity products.