In a move worthy of a high stakes poker tournament, the newest player in the competition to acquire Vision Systems (Melbourne, Australia) went all in, and apparently none of the other players had the stomach to call its bluff.

On Monday, Danaher (Washington) looked to win the three-way battle for Vision after its late-in-the-game $520 million (A$3.75 a share) bid apparently knocked out rivals Cytyc (Marlborough, Massachusetts) and Ventana Medical Systems (Tucson, Arizona), both indicating that the new offer was too rich for them to match.

Cytyc said that it would not raise its A$3.25 per share bid ($517 million total), and Ventana said it no longer planned to pursue the acquisition of Vision after Danaher upped the ante.

Shares in Vision Systems — a maker of instruments and reagents used in biopsy-based detection of cancer and infectious diseases — which have more than doubled in value since the bidding war started in August, fell more than 3% to A$3.70 on Tuesday as some investors took early profits.

"Vision's shareholders clearly benefit from this transaction, and we also recognize that Danaher and Leica Microsystems provide a unique set of opportunities for our businesses to thrive and continue to grow," said James Fox, managing director of Vision Systems. "We are excited by this combination and look forward to capitalizing on the opportunity to better serve our customers and provide stimulating challenges for our professionals worldwide."

Danaher's bid, approved by Vision Systems in the absence of a higher offer, is conditional on gaining 50.1% acceptance and is expected to close in 4Q06.

Both Cytyc and Ventana each own more than 10% of Vision Systems shares, enough to block Danaher from taking full ownership.

It also appears that Danaher sandbagged Ventana, terminating previously disclosed discussions regarding a potential cooperative effort to purchase Vision that had been unveiled last week in response to Cytyc's increased offer for Vision.

Vision's BioSystems arm sells automated machines to pathology labs and hospitals. The company locks in customers to high-margin three- to five-year packages for the reagents used with the machines.

Danaher said that Vision complements its Leica Microsystems pathology diagnostics business that supplies laboratories with equipment such as high-end microscopes. It said the combination with Vision will create "a leading global supplier of innovative solutions serving the anatomical pathology market. Together Vision and Leica Microsystems would offer a complete line of specimen preparation and diagnostic instruments while offering the advanced chemistries critical to the future of pathology."

"Vision has an attractive pathology diagnostics instrument and consumable product offering that fits very well with the growth strategy we are pursuing for our Medical Technology Platform," said H. Lawrence Culp Jr., president/CEO of Danaher. "Specifically, we believe that Vision's strength in rapid tissue processing and workflow-optimized advanced staining systems will allow us to drive growth by offering . . . improved productivity and advanced diagnostic technologies for use in clinical pathology laboratories."

Danaher said its offer price, on a per-share basis, is about 15% higher than Cytyc's already increased, unconditional bid of A$3.25.

Credit Suisse said in a research report that the Danaher deal equated to an earnings before interest, tax, depreciation and amortization multiple of 50 times. "The transaction solidifies Danaher's position in the attractive Life Sciences industry, which management estimates as a $3 billion global market growing at a healthy mid-single digit organic growth rate over the last five years," it said.

Not entirely folding its cards, Cytyc said that its bid remains open, calling it "the only offer currently open for shareholders to accept and is not subject to any conditions, unlike the offer by Danaher, which Cytyc understands will not be available for shareholders to accept until early November."

Christopher Gleeson, Ventana president/CEO expressed disappointment at losing the deal. "We indicated from the outset that the acquisition of Vision would have accelerated the realization of our strategy in certain areas," he said. "As such we are disappointed to miss this particular opportunity; however, we will continue to focus on executing against our existing growth plans . . . ."

In a move to block the competitors, Ventana last week acquired 22 million Vision shares, or 10.2% of the total outstanding shares on a fully diluted basis, at an average price of A$2.85 per share.

In other dealmaking news:

• Sigma-Aldrich (St. Louis) reported acquiring Advanced Separation Technologies (AST; Whippany, New Jersey), a chiral chromatography business. The purchase was made with cash, but the terms were not disclosed.

The company said the addition of AST will enhance the chiral chromatography capabilities and product line of its Research Specialties unit, enabling it to better support the analysis and purification of chiral compounds.

With annual revenue of roughly $2 million, the acquisition will not have a material impact on company sales, but will help meet growth goals over the next several years and be neutral to earnings in 2006, Sigma-Aldrich said.

Sigma-Aldrich makes biochemical and organic chemical products and kits used in scientific and genomic research, biotechnology, pharmaceutical development, the diagnosis of disease.

• Microline Pentax (Beverley, Massachusetts) reported a worldwide licensing agreement with Deam, a Netherlands corporation, for a Cable-Ring Technology that can be used in flexible surgical and diagnostic instruments. Terms were not disclosed.

"This license agreement represents a significant milestone for Microline Pentax strategy to develop and commercialize innovative surgical instruments for minimally invasive surgery," said Dr. Jean-Luc Boulnois, president/CEO of Microline Pentax, a subsidiary of Pentax (Tokyo).

Microline Pentax integrated modular laparoscopic instrument system consists of a selection of reusable handpieces that utilize an assortment of disposable tips.

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