A Medical Device Daily

United Surgical Partners International (USPI; Addison, Texas) reported signing an agreement to merge with UNCN Acquisition, an affiliate of Welsh, Carson, Anderson & Stowe (New York).

Holders of USPI common stock will receive $31.05 a share in cash for their shares, a 13.4% premium above the Jan. 5 closing price of $27.39, a 21.2% premium above the closing price of $25.62 on Nov. 13, 2006 (the day prior to receipt of Welsh Carson’s offer) and a premium of 18.8% above the average closing price of the USPI shares for the last three months of $26.13.

The transaction, valued at about $1.8 billion, includes assumption of certain debt obligations of USPI.

Donald Steen, chairman of USPI, said, “USPI will continue its intense focus on providing high-quality health services in partnership with its physician and non-profit health system partners.” He said he did not foresee any changes in USPI management as a result of the deal.

“Welsh Carson was the founding stockholder of USPI,” said Scott Mackesy, a General Partner of Welsh Carson. “We are enthusiastic about . . . putting our extensive experience and resources to work in helping USPI pursue its strategic objectives.”

Transaction close — expected to be completed in 2Q07 — is subject to approval by USPI’s stockholders and other customary closing conditions.

The merger agreement allows USPI until Feb. 17, 2007 (the “no shop period start date”), to solicit other bidders and, thereafter, subject to certain conditions, to respond to unsolicited inquiries by other persons. Should a superior offer be accepted, USPI may terminate the merger agreement. In connection with such termination, the company must pay a fee of $42.5 million to an affiliate of Welsh Carson, unless such termination is in connection with a proposal received prior to the no-shop date, in which case the company must pay $14.7 million to such Welsh Carson affiliate.

Welsh Carson says it is the largest equity firm in the world focused on investments in healthcare services, information and business services industries.

USPI was founded in 1998 by Steen and Welsh Carson to own and manage short-stay surgical facilities and has ownership interest in or operates 141 surgical facilities.

In other dealmaking:

• OnCure Medical (Newport Beach, California), a provider of freestanding radiation therapy services, reported acquiring Santa Cruz Radiation Oncology Medical Group (Santa Cruz, California). Terms were not disclosed.

Rick Zehner, CEO of OnCure, said that with the addition of the Santa Cruz facility, “it ensures our continued commitment to expand our regional networks of radiation centers in association with quality doctors.”

OnCure owns, operates and manages 35 radiation centers, all in California and Florida. Its centers provide treatment areas and equipment for radiation therapy and diagnostic radiology, including IMRT, IGRT, CT, and PETCT. OnCure also provides capital, technology, and management expertise to its affiliated physician groups.

• Pediatrix Medical Group (Fort Lauderdale, Florida), a provider of neonatal, maternal/fetal and pediatric subspecialty physician services, reported acquiring a neonatal physician group practice that serves three hospitals in the San Francisco area. Pediatrix said it paid cash for the practice — the amount undisclosed — and the transaction is expected to be accretive to earnings.

The seven neonatologists that form San Francisco Neonatology Medical Group care for premature and critically ill newborns at California Pacific Medical Center’s regional Level III neonatal intensive care unit. The group also staffs Level II NICUs at two hospitals in San Mateo County and provides well-baby care at the newborn nurseries at each of the three hospitals. Annual patient volume exceeds 13,000 NICU patient days and more than 10,000 newborn nursery days.

San Francisco Neonatology Medical Group participates in efforts to improve outcomes for babies born prematurely and maintains a neonatal database and is exploring clinical data mining to advance patient care.

• Spectranetics (Colorado Springs, Colorado) reported entering into a lease agreement with Corporate Office Properties Trust for a 75,000 square foot building in northern Colorado Springs, with expansion rights of another 40,000 sq. ft. on the same property, at Spectranetics’ option, during the first four years of the lease.

Spectranetics’ U.S. operations, covering about 65,000 square feet in four separate buildings in Colorado Springs, will be consolidated into the new facility in two phases. All R&D, clinical studies, regulatory, marketing, sales support and administrative functions are expected to move to the new facility in the first half of 2007, following completion of tenant improvements. All manufacturing and related support functions will move to the new facility.

Spectranetics manufactures single-use medical devices used in minimally invasive surgical procedures within the cardiovascular system in conjunction with its excimer laser system.

• Daxor (New York), a medical instrumentation and biotech company, reported buying two 10,000 square foot facilities for the Daxor Oak Ridge Operations (DORO; Oak Ridge, Tennessee). Terms were not disclosed.

DORO, which conducts Daxor’s equipment manufacturing, testing and development for the Blood Volume Analyzer BVA-100, will be moving into the new facilities to accommodate future research projects. Stephen Feldschuh, Daxor COO, said, “These new facilities are in integral step in our short- and long-term strategic plans to improve our production margins.”