A Medical Device Daily
Novant Health (Winston-Salem, North Carolina) reported Tuesday that it plans to buy a for-profit outpatient diagnostic imaging company that has 91 imaging centers across 13 states.
Novant said it would buy MQ Associates, the holding company of MedQuest (Alpharetta, Georgia), for $403 million in cash and debt. And, if MedQuest continues to perform well, Novant could pay an additional $35 million to the company’s current owners.
MedQuest will operate as a wholly-owned, for-profit subsidiary of Novant, much as the Partners HMO did during the 1990s, Novant said.
About two-thirds of MedQuest’s imaging centers are in North Carolina, South Carolina, Georgia, Virginia and Tennessee. In North Carolina, MedQuest has operations in Winston-Salem, Greensboro, Durham, Wilmington, Charlotte, Concord, Monroe and Mooresville.
The companies say the merger should provide economies of scale, increase the integration of patient medical records and reduce duplicative testing.
Novant will pay $45 million in cash at closing, and contingent consideration in an amount up to $35 million based on the company’s adjusted EBITDA during FY08.
In connection with the merger, MQ Associates’ controlling stockholder, an affiliate of J.P. Morgan Partners, has agreed to vote all of its shares of voting stock in favor of the merger.
MedQuest is an operator of independent, fixed- site, outpatient diagnostic imaging centers in the U.S. These centers provide high quality diagnostic imaging services using a variety of technologies, including MRI, computed tomography (CT), nuclear medicine, general radiology, bone densitometry, ultrasound and mammography.
Novant is a not-for-profit integrated group of hospitals and physician clinics serving North and South Carolina.
In other dealmaking news:
• SurModics (Eden Prairie, Minnesota), a provider of surface modification and drug delivery technologies to healthcare, reported that it has acquired BioFX Laboratories (Owings Mills, Maryland), a provider of substrates to the in vitro diagnostics industry, for $11.3 million in cash at closing and up to an additional $11.4 million in cash upon the successful achievement of specified revenue targets.
BioFX is a manufacturer of substrates, a critical component of diagnostic test kits used to detect and signal that a certain reaction has taken place. It offers both colorimetric and chemiluminescent substrates, as well as other products for use in in vitro diagnostic tests.
SurModics said BioFX’s product line and customer base complement its other product offerings for customers developing diagnostic test kits. The worldwide market for in vitro diagnostic tests is estimated to exceed $20 billion.
“The acquisition of BioFX Laboratories allows us to broaden our product and technology offerings in the important and growing in vitro diagnostics market,” said Bruce Barclay, president/CEO of SurModics. “We believe that the addition of BioFX’s high quality product line and technical expertise will solidify our position as a leading supplier of components to this market. We have a large and expanding customer base in this market, and the addition in the past year of recombinant autoimmune antigens to our already successful line of stabilization products has been well received.
“By combining the BioFX products with our own, we can offer more high value critical components to a broader customer base in the in vitro diagnostics market.”
The acquisition is expected to be accretive to SurModics FY08 earnings
BioFX will operate within the In Vitro Technologies business unit of SurModics. Charles Hewitt, PhD, CEO of BioFX Laboratories will lead the team in Maryland. The In Vitro Technologies business unit will remain headquartered in Minnesota.
• Walgreens (Deerfield, Illinois) reported that Bison Acquisition Sub Inc., its wholly owned subsidiary, has completed its tender offer for all of the outstanding shares of common stock of Option Care (Buffalo Grove, Illinois). The tender offer expired at midnight, EDT, at the end of Aug. 13.
There were tendered and not withdrawn 31,151,265 shares of Option Care common stock as of the expiration time, representing about 89.7% of the total outstanding shares of Option Care. Additional shares were guaranteed to be delivered within the next three days which, if added to the tendered shares, would represent in excess of 90% of the total outstanding shares of Option Care.
On Tuesday, Bison Acquisition Sub commenced a subsequent offering period for all remaining shares of Option Care common stock. The subsequent offering will expire at 5 pm, EDT, on Friday, unless extended. During this subsequent offering period, Option Care stockholders who did not previously tender their shares into the offer may do so and will promptly receive the same $19.50 per share cash consideration paid during the initial offering period.
Option Care offers patients healthcare services outside the hospital setting, working with more than 400 payor organizations, representing more than 75 million Americans. With what it calls “the largest home infusion and specialty pharmacy footprint in the industry,” Option Care offers treatment nationwide to patients in their homes, physician offices or other alternate sites, including ambulatory treatment centers.
• Bausch & Lomb (B&L; Rochester, New York) reported that it has filed with the Securities and Exchange Commission definitive proxy materials in connection with the company’s pending $3.67 billion merger agreement with Warburg Pincus, first disclosed in May (Medical Device Daily , May 25, 2007).
A special meeting of the shareholders of B&L to consider and vote upon the merger, has been scheduled for Sept. 21 at 10 a.m., EDT, at Clarion Riverside Hotel, Rochester, New York
• Advanced Medical Optics (AMO; Santa Ana, California) withdrew its rival $4.2 billion buyout bid for B&L earlier this month (MDD, Aug. 2, 2007).