A Medical Device Daily
Inverness Medical Innovations (IMI; Waltham, Massachusetts), a maker of rapid diagnostic products for the consumer and professional markets, reported completion of its $326.3 million acquisition of Cholestech (Hayward, California). IMI completed the acquisition, which was first disclosed in June (Medical Device Daily, June 5, 2007), through the merger of a wholly-owned subsidiary with and into Cholestech, after Cholestech’s shareholders approved the deal at a meeting on Wednesday.
Cholestech is a provider of diagnostic tools and information for immediate risk assessment and therapeutic monitoring of heart disease and inflammatory disorders.
The company is still waiting to close its acquisition of Bioste (San Diego) for $92.50 a share. In May, it beat out rival Beckman Coulter (Fullerton, California) for the right to acquire Biosite (MDD, May 11, 2007).
In August, the company agreed to acquire the assets of Matritech (Newton, Massachusetts), a developer of protein-based diagnostics, for about $36 million, payable in shares of IMI common stock (MDD, Aug. 29, 2007). That same month, it also said it would acquire HemoSense (San Jose, California), a developer of handheld blood coagulation monitoring systems, in an all stock deal for $165 million (MDD, Aug. 8, 2007).
“The acquisition of Cholestech together with our recent and pending acquisitions, provides Inverness with the unique ability to assess cardiac risk, diagnose cardiac conditions and potentially monitor the condition and response to therapy of cardiac patients. The Cholestech LDX System is one of the most established and respected monitoring platforms available to physicians and patients and we believe that this added access to physicians’ office laboratories will provide broad benefits for many Inverness and Biosite products,” said Ron Zwanziger, president/CEO and chairman of IMI.
Cholestech stockholders received .43642 shares of IMI common stock for each Cholestech share, resulting in an aggregate issuance of about 6,801,946 shares of IMI common stock. Additionally, each option to purchase shares of Cholestech common stock outstanding prior to the completion of the acquisition has been converted into a right to acquire IMI shares, at the same exchange ratio. Cholestech shares ceased trading on Wednesday and will be delisted from the NASDAQ.
Arcadia Resources (Southfield, Michigan) reported that it completed the sale of its Durable Medical Equipment (DME) locations in Florida and Colorado to Aerocare Holdings (Sugar Grove, Illinois) in two separate transactions for total proceeds of $7.7 million. In connection with the transactions, Arcadia will retain the accounts receivable relating to services provided at these sites prior to Aug. 16, totaling about $7 million.
After using part of the proceeds to reduce debt and other obligations by roughly $4.3 million, Arcadia said it will have about $10 million (including the balance of the purchase price and the expected collection of the remaining accounts receivable) to support its ongoing operations and further develop its DailyMed product offering. Aerocare held back $750,000 for 12 months to secure Arcadia’s obligations.
As part of the transaction, Arcadia and Aerocare Holdings have also agreed to negotiate a DailyMed co-marketing agreement for all of Aerocare’s locations nationwide within the next 90 days.
“This transaction is a significant step towards meeting our goal of reducing debt, increasing our cash position, investing in our DailyMed initiatives and generating positive EBITDA and operating cash flow beginning in October 2007, our fiscal 2008 third quarter,” said Arcadia’s CEO Marvin Richardson.
The agreement for the sale of the Florida operations includes certain obligations by Arcadia to compensate the buyer if the federal government enacts legislation that would reduce the Medicare rental oxygen reimbursement time period to less than 36 months in calendar years 2008 or 2009. The amount due the buyer would depend on the number of months that the new legislation would provide for reimbursement, and the maximum amount would be $1 million if the number of months is reduced to 18 months or lower.
Arcadia Resources is a national provider of alternate site healthcare services and products, including respiratory and durable medical equipment; non-medical and medical staffing, including travel nursing; comprehensive central fill and licensed pharmacy.
In other dealmaking news:
• Hologic (Bedford, Massachusetts), a provider of diagnostic and digital imaging systems directed towards women’s health, reported that its registration statement, including a joint proxy statement/prospectus, for a business combination with Cytyc (Marlborough, Massachusetts), has become effective.
A special meeting of the stockholders of Hologic, to consider and vote upon the transactions contemplated by the proposed $6.2 billion merger with Cytyc, has been scheduled for Oct. 18 at Hologic’s headquarters.
In May, the companies entered into a definitive merger agreement in a cash and stock transaction, under which Cytyc stockholders would receive 0.52 of a share of Hologic common stock and $16.50 in cash for each share of Cytyc common stock they own (MDD, May 22, 2007).