A Diagnostics & Imaging Week
HealthSouth (Birmingham, Alabama) said it has agreed to sell its diagnostic division to The Gores Group (Los Angeles) for about $47.5 million.
HealthSouth said that over the past 12 months it has realized $20.5 million in cash by divesting a number of individual diagnostic imaging facilities, as well as various equipment and assets owned by the division. The companies expect the transaction to be completed by the end of June or early 3Q07.
HealthSouth’s diagnostic division is comprised of a network of 54 freestanding diagnostic imaging centers in 19 states and Washington DC. While not all services are provided at all sites, 80% of the centers are multi-modality facilities offering a combination of outpatient diagnostic imaging services, including MRI, computed tomorgraphy, X-ray, ultrasound, mammography, fluoroscopy, and nuclear medicine services, the company noted.
Jay Grinney, HealthSouth president/CEO, said the sale “reflects continued progress in our strategic repositioning of HealthSouth as a post-acute healthcare provider, focusing on inpatient rehabilitative services. We have now entered into definitive agreements for the sale of all three of our ambulatory divisions. As with the sale of the other two divisions, the proceeds from this transaction will be used to pay down a portion of our long-term debt.”
HealthSouth will provide certain corporate support services to the new company for an interim period of time.
Founded in 1987, The Gores Group is a private equity firm focused on acquiring controlling interests in mature and growing businesses, which can benefit from the firm’s operating experience and flexible capital base.
In other dealmaking news:
• Biosite (San Diego) reported receiving copies of revised commitment letters from Inverness Medical Innovations’ (IMI; Waltham, Massachusetts) proposed financing sources in connection with its $90-a-share acquisition proposal
The company said its board, with the assistance of its financial advisor, Goldman Sachs & Co., and its legal advisors, Cooley Godward Kronish and Potter Anderson & Corroon, will review and evaluate the new information provided by IMI.
Biosite said two weeks ago that it would evaluate IMI’s offer, despite already having a merger agreement in place with an affiliate of Beckman Coulter. The IMI offer represents a per-share premium of $5 over Beckman’s offering price.
The Beckman tender offer for Biosite shares is still in place and is set to expire tomorrow. Additionally, the Beckman/Biosite merger has already cleared antitrust hurdles.
Biosite develops proteomics discoveries for the advancement of medical diagnosis.
• Novadaq Technologies (Toronto), a developer of medical imaging systems and image-guided therapies for the operating room, said it will acquire certain business assets of Xillix Technologies (Richmond, British Columbia), including all of Xillix’s intellectual property, certain capital assets and inventory. Novadaq will pay Xillix C$3 million at closing, of which C$1,075,000 will be paid in cash, C$1,925,000 paid in cash or, at Novadaq’s election, stock (at an issue price of $8.56 a share).
The IP purchased includes Xillix’s auto-fluorescence and multi-modal imaging portfolio of 31 issued patents and multiple pending applications in the U.S., Japan and Europe. The acquisition also includes licensed rights to fluorescence imaging technologies. The assets include endoscopy cameras and light sources.
“The Xillix acquisition should enable us to accelerate our commercialization efforts in the area of endoscopic fluorescence imaging and image guided therapies in minimally invasive surgical procedures,” said Dr. Arun Menawat, president/CEO of Novadaq. “Real-time fluorescence imaging through endoscopes should allow surgeons performing minimally invasive procedures through small incisions to see much more than what is possible with present day technology.”
Novadaq said that combining its existing IP for open and minimally invasive procedures with the Xillix portfolio, gives it the ability to potentially provide the most advanced imaging and image guidance in both procedural markets and across many specialties in the future.
Closing of the transaction, currently scheduled for early May, is subject to various conditions, including approval by the Supreme Court of British Columbia in connection with Xillix’s CCAA proceedings, and the Toronto Stock Exchange.
• Medtronic (Minneapolis) reported that it has exercised its option to acquire the O-arm imaging system assets of Breakaway Imaging (Littleton, Massachusetts). The acquisition brings the O-arm system into a portfolio of image guided surgical solutions within the Navigation (Louisville, Colorado) business of Medtronic.
The financial terms of the agreement, expected to close in June, were not disclosed.
“The O-arm represents an important step forward in image-guided surgery for Medtronic’s customers and their patients,” said Jim Cloar, VP and general manager of the Navigation business at Medtronic. “It will be an essential component in expanding the adoption of minimally invasive spine surgeries and opens the possibility for novel therapies which we believe are the wave of the future.”
The O-arm imaging system, with a breakable gantry and flat screen detector, provides multi-dimensional surgical imaging. It provides surgeons with 3-D images, as well as multi-plane 2-D, and fluoroscopic imaging. It is intended for use in orthopedic surgical procedures and is in use in more than 20 locations worldwide. The system received FDA clearance in 2005.