A Medical Device Daily
CardioDynamics (San Diego), a developer of impedance cardiography (ICG) technology, reported that it has reached an agreement to sell the company’s Vermed (Bellows Falls, Vermont) unit to the subsidiary’s management team for a cash purchase price of $8 million. Additionally, as a condition of closing, the company will enter into a five-year fixed price supplier agreement with Vermed for the company’s ICG sensors.
The transaction is contingent upon a number of customary legal and business conditions and is subject to approval by CardioDynamics’ shareholders. Once approved, the sale is anticipated to close in the latter part of the company’s fiscal third quarter ending August 31, 2007.
The company said the decision to sell Vermed would allow CardioDynamics to focus its resources on its ICG business, which management believes continues to hold the highest growth potential, while maintaining a long-term preferential relationship with Vermed for ICG sensors.
“Through this strategic transaction, we derive two essential benefits for CardioDynamics’ shareholders,” said Michael Perry, CEO of CardioDynamics. “First, we inject needed cash into the ICG business that will be utilized for continued expansion of our sales and clinical application specialist team, further investment in clinical trial research, and investment in core technology improvement. Our objective through these investments is to establish ICG in the treatment guidelines for heart failure and hypertension over the next five years.”
Perry added, “Secondly, it is very important for us to continue the excellent working relationship with the Vermed organization through a long-term supplier agreement. Not only will we receive a stable supply of ICG sensors for five years, but we will continue to partner with Vermed’s engineering team to develop enhancements to our proprietary sensors and also explore opportunities to continually lower sensor costs through design improvements. Within the next three to five years, we believe ICG sensors will likely comprise over 50% of revenue for the ICG business, and it is essential that we continue to enhance our proprietary position and drive cost efficiencies in this important recurring revenue stream.”
Vermed is a supplier of disposable electrodes and related supplies used in electrocardiograph (ECG) and other diagnostic procedures. The division has 85 employees that design, manufacture and package electrodes from its 45,000 square foot facility in Bellows Falls.
In other dealmaking news:
• Boston Scientific (Natick, Massachusetts) reported it has signed a definitive agreement to acquire privately held Remon Medical Technologies (Caesarea, Israel), for an undisclosed sum.
The acquisition is subject to customary closing conditions and completion of due diligence, and is expected to close over the summer.
Remon is a development-stage company focused on creating communication technology for medical device applications. The company was founded in 1997 and entered into a co-development agreement with Guidant (Indianapolis) in 2004. Guidant was acquired by Boston Scientific in April 2006.
“Remon Medical Technologies brings innovative sensor and wireless communication technology to Boston Scientific, which complements our Cardiac Rhythm Management product line,” said Fred Colen, executive VP, Operations and Technology, CRM, and chief technology officer.
“The acquisition by Boston Scientific will position Remon as a recognized leader in intra-body wireless communication and help realize the potential of our technology, once integrated into the portfolio of Boston Scientific products,” said Hezi Himelfarb, Remon Medical’s CEO.
Remon’s technology uses wireless communications to exchange energy and data with minute devices placed deep inside the body. These devices monitor a variety of physiological parameters, stimulate tissues and organs or activate other devices, creating therapeutic responses. Remon’s technology platform potentially offers broad applications for patient management, post-operative monitoring, nerve and tissue stimulation, local drug delivery, and drug development.
• Inverness Medical Innovations (IMI; Waltham, Massachusetts) reported that it has successfully completed its tender offer for the outstanding shares of Biosite (San Diego), which it agreed to acquire for $92.50 a share back in May (Medical Device Daily, May 11, 2007).
In the initial tender period which expired at midnight, EST, on Monday, 15,759,794 shares representing about 87.6% of Biosite’s outstanding common stock were tendered and not withdrawn prior to the expiration of the initial tender offer period, including 2,045,999 shares representing about 11.4% of Biosite’s outstanding common stock which were tendered by notice of guaranteed delivery.
The tendered shares, together with the 750,000 shares that IMI currently owns represent about 91.7% of Biosite common stock. All shares that were validly tendered and not withdrawn have been accepted for purchase.
Inverness will provide a subsequent offering period, which will expire at midnight, EST on Thursday, unless further extended. During this subsequent offering period, Biosite stockholders who did not previously tender their shares into the offer may do so and will promptly receive the same $92.50 per share cash consideration paid during the initial offering period.