A Medical Device Daily
Seeing that it was time to pony up or move on, Beckman Coulter (BC; Fullerton, California) upped its offer for Biosite (San Diego), matching the $90-a-share offer of rival bidder Inverness Medical Innovations (Waltham, Massachusetts).
If IMI doesn't make a counteroffer, BC will acquire all of Biosite's outstanding common stock in a cash tender offer for about $1.67 billion in total, an increase of $5 per share over the original merger agreement first disclosed last month (Medical Device Daily, March 27, 2007). The new purchase price is a 7.7% jump from the company's initial $1.55 billion proposal.
The company will extend its tender offer for all of Biosite's outstanding common stock until May 15.
Under the terms of the revised agreement, BC said it is no longer obligated to extend the amended offer beyond May 15, though it retains the right to do so.
As of May 1, only about 70,000 shares had been tendered and not withdrawn.
Biosite said Wednesday that all necessary regulatory clearances associated with Beckman's tender offer have been received.
If Biosite had terminated its deal with BC and accepted the IMI bid, it would have had to pay BC a $50 million termination fee.
"Our priority is to create sustainable value for Beckman Coulter's shareholders," said Scott Garrett, BC's president/CEO. "The compelling strategic rationale and economics of this transaction should enable us to achieve this objective at the revised price.
Garrett said that immunoassay testing is a primary growth driver for his company, "and we have been expanding this business at 15% to 20% per year – more than twice the market's growth rate — for the past several years." He added that the acquisition of Biosite "accelerates even further our ability to create value in this highly profitable market segment. "
At the revised price, BC sasid it expects the transaction to immediately accelerate its revenue growth, improve its operating margins, and, based on the specifics of the permanent financing and the timing of synergies, the transaction is expected to be essentially neutral or modestly accretive to 2008 GAAP earnings per share.
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.
"Only Beckman Coulter has an existing deep and successful relationship with Biosite that will allow it to move quickly to begin realizing value from this acquisition," said Garrett. "Operationally, we expect to realize significant improvements in the efficiency of Biosite's current supply chain and customer service channels. Longer term, we will have significant opportunities to leverage Biosite's pipeline of novel immunodiagnostic tests across Beckman Coulter's large and growing installed base of automated systems in hospital laboratories.
Under the revised bid, substantially all outstanding Biosite stock options will be cashed out at the closing, rather than being rolled over into Beckman Coulter stock options.
Morgan Stanley is acting as financial advisor to BC in connection with the acquisition and is serving as dealer manager for the proposed tender offer. Financing for the transaction has been fully committed by Morgan Stanley and Citigroup. Latham & Watkins is serving as legal counsel to Beckman Coulter.
In other dealmaking news:
• Digirad (Poway, California), a provider of cardiovascular imaging services and solid-state nuclear medicine imaging products, said it has completed the acquisition of privately held Ultrascan (Suwanee, Georgia) a provider of mobile ultrasound and nuclear medicine services primarily in Georgia, for $7.25 million in cash and the assumption of $1.5 million of debt, plus up to $3.85 million in cash and stock if Ultrascan achieves certain milestones over a four-year period.
Ultrascan provides mobile ultrasound services to more than 100 clients through a 32-unit mobile fleet as well as fixed-site nuclear imaging services at physician offices, clinics and hospitals primarily in Georgia.
"This transaction diversifies Digirad's services and expands our client base," said Mark Casner, CEO of Digirad. "It is a first step in our strategy to create long-term growth by leveraging and complementing Digirad's nuclear cardiology service capabilities with other mobile imaging services.
• HAPC (New York) said it has agreed with I-Flow (Lake Forest, California) to extend the termination deadline of the stock purchase agreement regarding HAPC's acquisition of InfuSystem (Madison Heights, Michigan).
The previous deadline of April 30 has been extended to June 29, the extension expected to allow HAPC sufficient time to address the remaining Securities and Exchange Commission comments on HAPC's preliminary proxy statement, which HAPC said are typical of a transaction of this type.
Sean McDevitt, chairman of HAPC said, "We have been working diligently to comply with all information requests by the SEC in terms of our intended acquisition of InfuSystem. Our change in auditor to Deloitte & Touche prior to filing a preliminary proxy has also had an impact on timing, but we believe we are nearing completion of the process and look forward to moving ahead with our strategic plans for the company."
InfuSystem supplies electronic ambulatory infusion pumps and various assorted supply kits used in the treatment of cancer and provides billing and collections services for these items to about 1,550 physician practices across the U.S.
Upon completion of the acquisition, HAPC intends to change its name to InfuSystem Holdings,
• Signature Hospital (Dallas) said it completed the acquisition of St. Joseph's Hospital (Parkersburg, West Virginia) from LifePoint Hospitals (Brentwood, Tennessee).
The acquisition follows approval from the West Virginia Health Care Authority and culminates about eight months of review and due diligence.
St. Joseph's, which was founded in 1900 and has 325 licensed beds, becomes the fourth — and largest — facility under the umbrella of Signature.