A Medical Device Daily

Tyco Healthcare (Mansfield, Massachusetts) yesterday said it has agreed to acquire 37.25% of the share capital of Airox (Pau, France) for about $40 million (EUR 31.7 million), as the first step in acquisition of the company.

Airox is a leading company in Europe's home respiratory ventilation systems sector, with 2005 revenue of about $22 million (EUR 18 million).

Tyco Healthcare will pay about $21.60 in cash per Airox share (EUR 17), representing, it said, a 30% premium over the current stock price. And with completion of the initial share purchase, it will launch a mandatory tender offer for the company's remaining shares at the same EUR 17-a-share price.

The initial share purchase and the subsequent tender, combined, are expected to total about $108 million (EUR 85 million). The transaction is expected to close by Oct. 31.

Closing conditions include due diligence, execution of consultancy and employment agreements with Airox management at closing and regulatory approval.

"The homecare ventilation and non-invasive ventilator segments represent the highest growth areas of the ventilator market," said Rich Meelia, CEO of Tyco Healthcare. "Airox is a strong and well-respected innovator in the market, with a core competency in research and development. The Airox product portfolio adds to Tyco Healthcare's existing ventilator offerings, helping us to further expand our product line, better meet customer needs and expand our global reach."

As a major business segment of Tyco International (Pembroke, Bermuda), Tyco Healthcare is a large producer of respiratory-related products for the hospital and home, its brand names including Autosuture, Kendall, Mallinckrodt, Nellcor, Puritan Bennett, Syneture and Valleylab.

Selling in both Europe and Asia, Airox has about 50 employees and had revenues of about $22 million in 2005, selling turbine-based ventilators for home care and non-invasive respiratory therapy.

In other dealmaking activity:

• Cantel Medical (Little Falls, New Jersey) reported that its subsidiary, Carsen (Markham, Ontario), has closed the sale of its assets to Olympus America (Center Valley, Pennsylvania) and certain of its affiliates.

Carsen sold all assets to Olympus except those related to its Medivators business and certain other smaller product lines.

The deal was first developed in mid-2005 and amended earlier this year (Medical Device Daily, May 18, 2006).

Olympus Canada has hired "substantially all" of Carsen's employees and took over Carsen's Olympus-related operations, as well as the operations for the other acquired product lines.

The purchase price was about $31.5 million, comprised of a fixed sum of $10 million, plus another formula-based $21.5 million, of which $4 million was paid prior to July 31, and $26.6 million paid on July 31. The balance of $900,000 is subject to adjustment to be determined during the first quarter of FY07.

Olympus also will pay Carsen 20% of Olympus revenues attributable to Carsen's unfilled customer orders as of July 31, assumed by Olympus at the closing. Such payments - of about $450,000 - will be made following Olympus' receipt of customer payments for these orders. Net proceeds from Carsen's sale of assets and the termination of Carsen's operations, after satisfaction of remaining liabilities, are estimated at about $22 million.

The deal coincides with the expiration of Carsen's distribution agreements with Olympus, so that Carsen no longer has any products or active operations.

Cantel is a provider of infection prevention and control products, including medical device reprocessing systems for renal dialysis and endoscopy, dialysis supplies, water purification equipment, disinfectants and cleaners, membrane filtration and separation products, and specialty packaging.

• Netsmart Technologies (Great River, New York), a provider of software for health and human services, has acquired the business of QS Technologies (QS; Greenville, South Carolina) from Intelligent Systems (Norcross, Georgia) for an initial $1.9 million in cash and a $1.435 million promissory note, plus the assumption of about $1.8 million in liabilities, primarily deferred revenue.

The transaction also provides for milestone payments to Intelligent of up to $1.45 million in 2008, based on QS business through 2007.

Founded in 1979, QS delivers public health solutions and records software to 70 public health agencies in nine states.

With the addition of QS, Netsmart said it will serve more than 1,325 customers including 34 state agencies, making its user base "the largest connected community in the health and human services industry."

Netsmart's clients include health and human services organizations, public health agencies, mental health and substance abuse clinics, psychiatric hospitals and managed care organizations.

• GeneDetect (Bradenton, Florida/Auckland, New Zealand), a supplier of products and services to academic and government research institutions and pharmaceutical and biotech companies, said it will divest its branded GeneDetect and GreenStar hyperlabeled gene probe products so that it can pursue what it called "alternative strategic opportunities." The company said it expects the deal to be completed by early 2007.

GeneDetect and GreenStar hyperlabeled gene probe products are used to measure gene expression in tissue samples to develop therapeutics.

Dr. Paul Hughes, CEO and chairman of GeneDetect, said, "We believe there will be widespread interest in the tender process. We intend to use net proceeds from this sale to develop other products that will drive our company's long-term growth." Closing date for tenders is Dec. 31.

GeneDetect manufactures more than 4,000 products for the life sciences, selling in more than 40 countries and offering e-commerce for ordering.