A Medical Device Daily

An independent consortium led by the Blackstone Group reported that it has initiated its tender offer to acquire all of the outstanding common shares of orthopedic company Biomet (Warsaw, Indiana) for $11.4 billion, or about $46 per share in cash.

The buyout group, which also includes affiliates of Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and Texas Pacific Group, said it will complete a second-step merger in which any remaining common shares of Biomet will be converted into the right to receive the same per share price paid in the offer.

The $46 per share offer price represents a premium of 32.3% over the closing price of Biomet’s common stock on April 3, the trading day prior to public speculation that the company was exploring strategic alternatives.

The group upped its offering price from $10.9 billion to $11.4 billion last week in the wake of influential proxy advisory service Institutional Shareholders Services ’ (ISS; Rockville, Maryland) recommendation to Biomet shareholders to reject a private buyout (Medical Device Daily, June 8, 2007).

“Although the deal terms appear fair as of the time of the deal’s announcement in December, the rally of the peer group” and its main joint reconstruction business “imply that there is little takeover premium” in the original offer of $44 per share, the ISS report said.

The offer and withdrawal rights will expire at midnight, EST, on July 11, unless the offer is extended.

The buyout offer was first disclosed this past December (MDD, Dec. 20, 2006).

The dealer managers for the offer are Banc of America Securities and Goldman, Sachs & Co., and the information agent for the offer is Innisfree M&A .

Triad Hospitals (Plano, Texas) reported that its stockholders have adopted the agreement and plan of merger with Community Health Systems (CHS; Franklin, Tennessee) and a wholly owned subsidiary of CHS.

The merger agreement was adopted by the affirmative vote of the holders of a majority of the outstanding shares of common stock of the company.

Triad stockholders will receive $54 per share (or a total of about $6.8 billion) of Triad common stock in cash, without interest.

The company said it currently expects the transaction to close early in 3Q07, subject to various regulatory approvals and the satisfaction of all closing conditions.

Triad, through its affiliates, owns and manages hospitals and ambulatory surgery centers in small cities and selected larger urban markets.

In other dealmaking news:

• Respirics (Raleigh, North Carolina) reported that it has decided to divest its assets relating to MD Turbo.

MD Turbo, the company’s first commercial device, is a companion product designed to assist patients who use pressurized metered dose inhalers (pMDI) for asthma and COPD; the incidence of these diseases in the U.S .alone is more than 40 million. The company said that MD Turbo solves two major challenges patients have with proper pMDI use: coordination of inhaler actuation with patient inhalation and accounting for how much medication is in an inhaler at any given time.

MD Turbo was cleared by the FDA for marketing in 2005 and was launched in the U.S. last year.

This company said the decision to sell MD Turbo completes an evaluation that had been underway for some time and indicates the company’s decision to focus solely on its Acu-Breathe dry powder inhaler platform.

“MD Turbo is a helpful product and we’ve received a lot of very positive feedback about the value it can bring to patients who use inhalers,” says Gilbert Mott Jr., president/CEO of Respirics. “The product has been on the market for a year, and we believe it deserves to be in the hands of a company with resources to vigorously promote it. Consequently, we’ve decided to sell MD Turbo so the product can receive the attention it merits.”

Respirics is a pulmonary drug delivery and development company. The company has two delivery platforms, MD Turbo for use with metered dose inhalers, and Acu-Breathe single and multi-dose dry powder inhalers.

• Core Oncology (Santa Barbara, California) reported that it has closed on its acquisition of Mills Biopharmaceuticals (Oklahoma City, Oklahoma), the brachytherapy division ofColoplast (Humlebaek, Denmark).

Mills Biopharmaceuticals is the third largest domestic supplier of Iodine 125 and Palladium Pd-103 seeds for low dose prostate brachytherapy treatment. ProstaSeed has been commercially available since April of 1999 and is both CE marked and manufactured at ISO 9001:2000 standards. In early 2003 the company was acquired by Mentor (also Santa Barbara). In June 2006 Coloplast acquired Mills Biopharmaceuticals as part of the urology portfolio from Mentor.

Core Oncology was formed by the senior management of the existing brachytherapy business and Compass Capital for the purpose of acquiring the brachytherapy business from Coloplast.

• A subsidiary of LifeCare Holdings (Plano, Texas) has entered into a restated and amended sale/leaseback transaction with Health Care REIT (HCN; Toledo, Ohio).

HCN has purchased from LifeCare the long term acute care hospital currently being constructed by the company in Waukesha, Wisconsin, and has leased the facility back to LifeCare.

The total purchase price for the hospital, following the completion of construction, is expected to be about $25.6 million. The initial lease term is 15 years and LifeCare has one 15-year renewal option.

LifeCare operates 19 long term acute care hospitals located in nine states.