A Medical Device Daily

Matria Healthcare (Marietta, Georgia) reported completing the sale of Facet Technologies (also Marietta), the company's subsidiary specializing in diabetes product design, development and assembly, to Water Street Capital (Chicago). Proceeds from the sale of Facet, first disclosed in July (Medical Device Daily, July 28, 2006), were about $122 million.

Matria said it has used the net proceeds to complete its prepayment of the company's First Lien, Tranche C indebtedness due January 2007.

Matria is a provider of comprehensive health enhancement programs to health plans, employers and government agencies.

KBL Healthcare Acquisition Corp. II (New York) reported that it has agreed to acquire privately held Summer Infant (North Smithfield, Rhode Island), a maker of branded durable infant health, safety and wellness products.

KBL will purchase Summer Infant and its two affiliate companies, Summer Infant Europe, and Summer Infant Asia, for an initial payment of $20 million in cash and 3,916,667 shares of KBL common stock, subject to closing adjustments based on net worth. KBL will also assume or repay Summer Infant's outstanding debt, about $10.1 million as of June 30, at closing.

Summer Infant stockholders will also be entitled to receive up to $5 million in additional performance payments, based on 50% of audited EBITDA in excess of $4.2 million, $10 million and $15 million for the years ended Dec. 31, in 2006, 2007 and 2008. In addition, they will be entitled to receive another 2.5 million shares of KBL common stock if the closing market price of KBL's common stock exceeds $8.50 for 20 of 30 trading days at any time prior to April 20, 2009.

All of the stockholders, officers and directors of Summer Infant have agreed not to sell any of the KBL shares they will receive until April 21, 2008, subject to certain exceptions.

Summer Infant's current management team will continue to run the business following close of the acquisition. In addition, Jason Macari, Summer Infant's CEO, will assume that position at KBL and Dr. Marlene Krauss will become chairman of the board of KBL.

Upon close of the acquisition, KBL will change its name to Summer Infant.

Summer Infant currently has more than 60 products, including nursery audio/video monitors, safety gates, durable bath products, bed rails, infant thermometers and related health and safety products, booster and potty seats and bouncers.

In other dealmaking news:

Imaging Diagnostic Systems (IDSI; Fort Lauderdale, Florida) a developer of laser optical imaging systems, reported that it has licensed its laser optical imaging technology for use in small animal imaging to Bioscan (Washington). Bioscan will pay an up-front license fee – the amount not disclosed – and royalty payments as the technology is commercialized.

IDSI granted Bioscan an exclusive worldwide license to manufacture and distribute optical imaging equipment incorporating IDSI's Laser Imager for Lab Animals (LILA) technology. IDSI will transfer its small animal optical computed tomography (CT) technology, including licensing 10 issued and three pending U.S. optical CT imaging patents.

• PerkinElmer (Boston), a leader in health sciences and photonics, said it has acquired Avalon Instruments (Belfast, Northern Ireland). Financial terms were not disclosed.

PerkinElmer said the acquisition expands and complements its molecular spectroscopy product portfolio by adding a family of bench-top dispersive Raman spectrometers. The Avalon Raman platforms support both bulk analysis and microscopic imaging, enabling scientists and technicians to gain more information about their samples with excellent reproducibility. Terms of the deal were not disclosed.

Raman spectroscopy identifies and characterizes the composition of both organic and inorganic materials in a wide range of applications. It is a complementary analysis technique to near infrared spectroscopy (NIR) and infrared spectroscopy (IR).

• Arcadia Resources (Southfield, Michigan), a national provider of home care, staffing services and related home care equipment, said it has acquired Lovell Medical Supply (North Wilkesboro, North Carolina), a respiratory and durable medical equipment company. Financial terms were not disclosed.

Arcadia said that Lovell Medical generates about $3 million in annualized revenues.

• LifeNet (Virginia Beach, Virginia) reported thatit has executed an agreement with Zimmer (Warsaw, Indiana), which provides that company with certain rights and licenses to patents and intellectual property related to LifeNet's Allowash technology for tissue and allograft bone cleaning and sterilization. The terms of the agreement are confidential, the companies said.

LifeNet said it holds seven U.S. patents related to its Allowash process.