Inverness Medical Innovations (IMI; Waltham, Massachusetts) upped the ante for the second time in its bid to acquire Biosite (San Diego) out from under the nose of rival suitor Beckman Coulter (BC; Fullerton, California), raising its offer by $2.50 a share to $92.50.
This latest move comes just over a week after Beckman, the initial buyer, matched IMI's $90-a-share offer which priced the acquisition at $1.64 billion (Medical Device Daily, May 3, 2007). That price was $5 less than BC's original $85 per share offer that was first disclosed back in March (MDD, March 27, 2007).
Just days after BC's tender offer was initiated, IMI made its first sweetened bid for the company, saying that it had been in talks to buy Biosite for more than 10 months prior to the BC offer (MDD, May 1, 2007).
Commenting on the new offer, Ron Zwanziger, president/CEO and chairman of IMI said, "As we have stated before, we are committed to consummating this compelling transaction and through this offer have enhanced the speed, certainty and value of our proposal accordingly. He added that the company expects a combination with Biosite will be accretive to IMI's cash-based EPS in the near term "as we quickly leverage our unique blend of entrepreneurial culture and sophisticated technological ability with Biosite's strength in proprietary protein markers and robust cardiovascular platform."
Biosite acknowledged receiving the sweetened offer, but noted that it came with some conditions designed to hasten the process along.
The letter from Inverness outlining the offer to Biosite says that IMI may withdraw its offer in the event that Biosite failed to transmit a written notice to Beckman Coulter by 5 p.m., Pacific Daylight Time, yesterday, stating that the matching period (as defined in the existing merger agreement between Biosite and Beckman Coulter) shall expire no later than 11:59 p.m., EDT, on Tuesday, May 15. Biosite added that the letter from Inverness further contemplates that, in the event that the Inverness offer has not been withdrawn, the offer will remain open until 8 a.m., EDT, on May 16.
If Biosite terminates its offer with BC, it will have to pay that company a $50 million breakup fee.
BC has had a business relationship with Biosite over the past four years in the area of B-type Natriuretic Peptide, a test that aids in the diagnosis, risk stratification and assessment of severity of heart failure and the risk stratification of patients with acute coronary syndromes. It combines BC's laboratory instrument systems, with Biosite's near-patient tests.
Inverness, which currently specializes in pregnancy and fertility tests, has had its eye on expanding the focus in the immunoassay testing market for a while. An accepted bid for Biosite would make Inverness an immediate player in cardiac diagnostics.
Biosite makes tests to diagnose cardiovascular disease, infectious diseases, drug abuse, and diseases involving blood clots and the circulation of blood in the brain. In 2006, the company posted earnings per share of $2.20 and booked revenue of $308.6 million.
In other dealmaking news:
• Hillenbrand Industries (Batesville, Indiana) reported that its board approved in principle a plan to separate into two independent publicly traded companies, with each strategically positioned to capitalize on growth opportunities in their respective markets.
Under the plan, Hill-Rom, the company's medical technology business, would be spun out of Hillenbrand Industries through a tax free dividend of its shares to Hillenbrand Industries shareholders. Batesville Casket would become the sole operating unit of Hillenbrand Industries and would continue to be publicly traded under the Hillenbrand Industries name.
The separation is expected to be completed within nine months, Hillenbrand said.
"Hillenbrand Industries' board of directors and senior leadership team carefully weighed a number of alternatives to maximize the company's long-term value for its shareholders," said Rolf Classon, chairman of Hillenbrand. "After a detailed review, we concluded that there is a strong business case to support the separation of the two companies. In addition, the strength of our current and projected performance supports this action. We feel that separation at this time is the best way to unlock value and allow each company to focus on growing at industry leading rates."
Under the plan, the current management team of each company would remain in place. Hill-Rom would be led by Peter Soderberg, and Hillenbrand Industries (Batesville Casket) would be led by Kenneth Camp.
Immediately after the separation, Hillenbrand Industries shareholders would own shares in both entities. The transaction will be subject to the final approval of the board of directors, favorable market conditions, receipt of a tax ruling from the IRS or tax opinions, filing and effectiveness by Hill-Rom of a registration statement with the Securities and Exchange Commission, completion of necessary debt refinancings and other customary conditions.
Hillenbrand Industries will retain its listing on the New York Stock Exchange and Hill-Rom would intend to apply to list its shares on the New York Stock Exchange under a new symbol.
Hill-Rom is a worldwide manufacturer and provider of medical technologies and related services for the healthcare industry, including patient support systems, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals, and information technology solutions.
• Endevco (San Juan Capistrano, California), a developer of sensing solutions for demanding vibration, shock and pressure applications, said it is now part of the new Meggitt Sensing Systems (MSS) division of Meggitt (Dorsett, UK).
The division has been formed by merging the Meggitt Aerospace Systems and Meggitt Electronics groups into a single entity that aligns some of the world's most notable companies in the sensing industry with related products, services and applications.
With centers of excellence in France, Switzerland, Spain, the UK and the U.S., MSS said it will have unmatched capabilities to deliver more critical sensing solutions into the aerospace, energy, medical, industrial and automotive sectors than any other company.
The new division will be led by Dr. Richard Greaves, a 30-year industry veteran and most recently the managing director of Meggitt Aerospace Systems.