A Medical Device Daily
Owens & Minor (O&M; Richmond, Virginia) reported that it has completed the transition of the acute-care distribution business acquired from McKesson Medical-Surgical, a business unit of McKesson (San Francisco) on Sept. 30, 2006.
Immediately following close of the transaction, O&M and McKesson launched a cooperative, six-month transition effort designed to achieve an orderly, rapid conversion of the customer base and transfer of inventory to O&M by the end of March 2007.
In the roughly $169 million transaction, O&M acquired certain assets, including net inventory valued as of the closing date at about $122 million, customer contracts, and 10 leased warehouse facilities.
"We are very proud of our teammates, especially those assigned to the transition team, for achieving our aggressive timetable for this large-scale conversion," said Craig Smith, president/CEO of O&M. "Our teams are working to fine tune this new business so that we achieve additional benefits from greater productivity and efficiency in our distribution network this year. The cooperative conversion effort with McKesson proved to be a win-win for all concerned."
As previously disclosed, the company continues to expect that the net dilutive effect of the McKesson transition in 1Q07 will be in a range $9 million to $12 million. O&M continues to expect that the transaction will be accretive in 2007, with acceleration of earnings growth in the second half of the year.
O&M is a distributor of national name-brand medical and surgical supplies and is a healthcare supply chain management company.
In other dealmaking news:
• MDS (Mississauga, Ontario), a provider of products and services to the global life sciences markets, reported completing its $615 million all-cash acquisition of Molecular Devices (Sunnyvale, California).
This merger, first disclosed in January (MDD, Jan. 30, 2007), follows completion of the tender offer by MDS for all of the shares of Molecular Devices for $35.50 a share.
At the time the merger became effective, MDS owned in excess of 90% of Molecular Devices' issued and outstanding shares. As a result of the merger, any Molecular Devices shares not tendered in the tender offer have been converted into the right to receive $35.50 per share.
Following the expiration of the initial offering period, MDS launched a new business unit called MDS Analytical Technologies, combining the Molecular Devices and MDS Sciex businesses to serve pharmaceutical, biotechnology, government, and academic laboratory customers with solutions to improve the speed and efficacy of their drug discovery and development efforts.
Andy Boorn, PhD, president of MDS Sciex, will lead the new unit and will launch integration plans to bring together the two businesses.
With completion of the acquisition, Molecular Devices' shares were delisted from the NASDAQ Global Select Market and ceased trading at the close of business Tuesday.
• Electro Optical Sciences (EOS; Irvington, New York) reported the signing of an agreement with L'Oreal (Paris) to study and assess the feasibility of using EOS' multi-spectral imaging technology for the evaluation and differentiation of pigmented skin lesions of cosmetic importance.
EOS has granted L'Oreal an option to take an exclusive license to use EOS technology in the field covered by the research, on terms to be mutually agreed. The laboratory and clinical research will be funded by L'Oreal.
"Important multi-spectral imaging-based diagnostic systems for cosmetic conditions may result directly from this collaboration," said Joseph Gulfo, MD, president/CEO of EOS. EOS is focused on designing and developing a non-invasive, point-of-care instrument to assist in the early diagnosis of melanoma. MelaFind, EOS's flagship product, features a hand-held imaging device that emits light of multiple wavelengths to capture images of suspicious pigmented skin lesions and extract data. Using sophisticated algorithms, the data are then analyzed against a database of melanomas and benign lesions in order to provide information to the physician and produce a recommendation of whether the lesion should be biopsied.