A Medical Device Daily
Ventana Medical Systems (Tucson, Arizona), a developer of tissue-based cancer diagnostics, reported that it has acquired Spring BioScience (Fremont, California), a developer and supplier of “next-generation” rabbit monoclonal antibodies and other reagents, for $28.9 million in cash.
Ventana will also pay Spring shareholders up to $11.7 million over the next two years as Spring achieves specific scientific milestones. Spring BioScience, will remain in its Fremont, California location and be operated as a wholly-owned subsidiary of Ventana.
According to Ventana, the acquisition complements and solidifies its ability to rapidly develop world-class diagnostic antibody reagents, required components of its advanced staining technologies and critical to its long term companion diagnostics initiatives. It added that the acquisition will also streamline the company’s supply chain thereby reducing its reliance on external suppliers along with adding incremental gross margin on the replacement of current advanced staining antibodies. Spring’s expertise in antibody development provides Ventana significant synergies within its SISH and Quantum Dots development programs, it added.
The transaction is expected to be accretive to Ventana’s GAAP earnings per share, including 5 cents in 2008, and 9 cents in 2009. Ventana will also record a non-cash charge for in-process R&D and transaction related expenses in 3Q07.
“Adding Spring’s world-class team and capabilities to Ventana represents the achievement of our goal to establish and grow resources for product development and antibody design within our organization,” said Christopher Gleeson, Ventana’s president/CEO. We now have the full range of internal capabilities to develop and distribute tissue-based cancer diagnostics to pathologists and patients around the world. In addition, because antibody development is a principle component of almost all companion diagnostics programs, the acquisition of Spring BioScience further enhances Ventana’s global leadership in the rapidly emerging area of companion diagnostics — the future of personalized medicine.
P&M Corporate Finance acted as financial advisor and Snell & Wilmer acted as legal counsel to Ventana.
Venatana is still the target of a $75-a-share hostile takeover bid from Roche (Basel, Switzerland). The hostile takeover bid, valued at about $3 billion, was first disclosed publicly at the end of June (Medical Device Daily, June 27, 2007), after months of what Roche said were fruitless private advances.
Biomet (Warsaw, Indiana) reported that at a special meeting its shareholders approved the $11.4 billion merger agreement with LVB Acquisition and LVB Acquisition Merger Sub that will take the company private.
Based upon a preliminary tally, 91.56% of the total shares outstanding voted for the merger. LVB Acquisition, and LVB Acquisition Merger Sub are indirectly owned by investment partnerships directly or indirectly advised or managed by the Blackstone Group, Goldman, Sachs & Co., Kohlberg Kravis Roberts & Co. and TPG.
Subject to satisfaction of the closing conditions in the merger agreement, Biomet said it expects the transaction to be completed by the end of September. Pursuant to the merger agreement, LVB Acquisition Merger Sub will merge with and into Biomet. As a result, Biomet will become a wholly-owned subsidiary of LVB Acquisition.
Biomet shareholders will receive $46 in cash, without interest and less any required withholding taxes, for each outstanding Biomet common share. The deal price was sweetened from the initial price of $44 a share back in June after several institutional shareholders threatened to withhold their shares from the merger, claiming a marginal takeover premium associated with the deal (MDD, June 8, 2007).
The original offer was first disclosed back in December (MDD, Dec. 20, 2006).
Biomet and its subsidiaries make products used by musculoskeletal medical specialists in surgical and non-surgical therapy.
In other dealmaking news:
• SafeStitch (Miami), a private company developing endoscopic and minimally-invasive surgery devices, has been acquired by Cellular Technical Services (CTS; Valley Stream, New York), a publicly-traded company with no active operations.
SafeStitch has an R&D office in Omaha, Nebraska.
CTS said it intends to apply to have its shares listed on the American Stock Exchange.
SafeStitch’s portfolio includes a device for endoscopic bariatric surgery (obesity surgery) and endoscopic repair of gastroesophageal reflux disorder (GERD), as well as an endoscopic device for excision and diagnosis of Barrett’s esophagus. The company also plans to market a standard bite block, as well as the first airway bite block, to be used during endoscopy, and is pioneering the Smart Dilator for esophageal strictures. SafeStitch also intends to develop products for hernia repair and natural orifice transluminal endoscopic surgery.
Dr. Phillip Frost, former CEO and chairman of IVAX (Miami) and Dr. Jane Hsiao, former vice-chairman and chief technology officer of IVAX, along with Dr. Charles Filipi, professor of surgery at Creighton University Medical School (Omaha, Nebraska), and Jeffrey Spragens, one of the founders of North American Vaccine (Beltsville, Maryland) are the principal investors in SafeStitch. Hsiao will become chairman of the board; Spragens, the president/CEO; Dr. Stewart Davis, formerly of Innovia (Miami), the COO; and Filipi, medical director.
The Frost Group, a private equity group headed by Frost, along with Spragens, will provide the company with a $4 million line of credit. These proceeds, along with about $3 million in cash held by CTS, are expected to be sufficient to fund the company’s continued development and upcoming clinical trials, it said.
• RadNet (Los Angeles), a provider of diagnostic imaging services through a network of owned and operated outpatient imaging centers, has acquired three multimodality imaging centers in Victorville, California, for $3.3 million plus assumption of about $1.2 million of debt.
The centers, previously owned by Valley Imaging Center, will increase RadNet’s presence in a market where, prior to the acquisition, RadNet had a single-modality open MRI location which it acquired as part of its acquisition of Radiologix (Dallas).
With about $6 million of annual revenues, Valley Imaging has revenues of about $6 million. The acquired centers offer a combination of MRI, CT, X-ray, mammography, fluoroscopy and ultrasound.
• NationsHealth (Sunrise, Florida) said it has acquired Diabetes Care & Education (DC&E), a provider of insulin pumps, pump supplies and blood glucose monitoring equipment.
NationsHealth purchased all of the issued and outstanding capital stock of DC&E for $2.5 million in cash and $500,000 in shares of unregistered common stock of the company. NationsHealth may also pay additional cash amounts based on annual revenue targets associated with DC&E’s pump and education operations in 2008, 2009 and 2010.
NationsHealth provides home delivery of diabetes supplies, medications and other medical products to patients across the nation.
DC&E is a provider of insulin pumps, pump supplies and blood glucose monitoring equipment through its three facilities in Louisville, Kentucky; Morehead City, North Carolina; and Greenville, South Carolina.
• FoxHollow Technologies (Redwood City, California) said it has set Oct. 4 as the date of the special meeting of its stockholders to vote on the proposed merger with ev3 (Plymouth, Minnesota). The record date for determining stockholders entitled to vote at the special meeting was the close of business on Aug. 30.
Assuming the FoxHollow stockholders approve the agreement, the companies said they anticipate deal completion on or about Oct. 5.
The $750 million cash and stock merger was first disclosed in July (MDD, July 24, 2007).
ev3 is focused on endovascular technologies for the minimally-invasive treatment of vascular diseases and disorders. FoxHollow develops minimally-invasive devices for the removal of plaque and thrombus for the treatment of peripheral artery disease.
• Symmetry Medical (Warsaw, Indiana), a provider of orthopedic devices, reported that it has completed the previously disclosed $15.1 million acquisition of Specialty Surgical Instruments (SSI) and Ultra Containers of America (UCA; both Nashville, Tennessee), a provider of specialty surgical instruments and sterilization containers (MDD, Aug. 30, 2007).