A Medical Device Daily

Quest Diagnostics (Lyndhurst, New Jersey), one of the nation's largest providers of diagnostic testing, information and services, said it will acquire infectious disease testing provider Focus Diagnostics (Herndon, Virginia) in a cash transaction valued at about $185 million.

Quest said the acquisition of privately held Focus will add annual revenues of about $65 million.

Focus Diagnostics is a portfolio company of private equity firms DLJ Merchant Banking and The Sprout Group. Excluded from the transaction is Focus Bio-Inova , Focus Diagnostics' pharmaceutical testing operation.

The transaction, which is expected to close sometime in 3Q06, is subject to regulatory review and other customary closing conditions. Additional terms of the transaction were not disclosed.

“Focus Diagnostics has been recognized worldwide for its leadership in infectious and immunologic diseases and its expertise in developing new diagnostics,” said Surya Mohapatra, PhD, chairman and CEO of Quest. “Focus Diagnostics will further expand our capabilities and strengthen our position as the leading provider and developer of esoteric tests to hospitals and physicians.”

The company said the acquisition is not expected to have a material impact on its 2006 earnings per share, excluding anticipated charges associated with the transaction.

Focus Diagnostics offers its reference testing services to large academic medical centers, hospitals and commercial laboratories. The company has also established a reputation for being first to introduce new assays to the market, including diagnostic tests for Lyme disease, West Nile Virus and SARS. In addition, Focus develops diagnostic products, such as HerpeSelec for Herpes Simplex Virus.

Inverness Medical Innovations (IMI; Waltham, Massachusetts) reported that it will acquire 49% of the capital stock of TechLab (Blacksburg, Virginia), a privately-held diagnostics company, in exchange for 303,417 shares of Inverness common stock. TechLab develops rapid non-invasive intestinal diagnostics tests in the areas of intestinal inflammation, antibiotic-associated diarrhea and parasitology.

The company said the transaction provides IMI, whose Wampole subsidiary already distributes TechLab's products in the U.S., with exclusive global distribution rights to TechLab's line of enteric disease testing products, as well as future human medical diagnostic products, as Techlab's existing global distribution relationships lapse.

These products include both ELISA and rapid format assays for the detection of C. difficile toxins A&B.

TechLab has developed and now, with access to Inverness' intellectual property, expects to commence selling the only FDA-cleared rapid membrane assay to detect fecal lactoferrin, a test that can help differentiate bacterial enteric infections and inflammatory bowel diseases from maladies such as irritable bowel syndrome and diverticulitis.

TechLab will continue to operate with the current executive management team of Tracy Wilkins, PhD, as president, David Lyerly, PhD, as vice president of research and development and David Wall as vice president of operations.

The agreement includes an option for IMI to acquire any shares of TechLab offered for sale to third parties by the existing shareholders.

In other dealmaking news, Danaher (Washington) reported that it has completed the merger of its indirect wholly owned subsidiary, Smile Acquisition Corp. , into Sybron Dental Specialties (Newport Beach, California) and, as a result, Sybron has become a direct wholly owned subsidiary of Danaher.

The merger follows Danaher's acquisition by tender offer of about 94% of Sybron's outstanding common stock at a price of $47 per share, net to the seller in cash.

Danaher first proposed the roughly $2 billion acquisition of Sybron back in April (Medical Device Daily, April 13, 2006).

Sybron's common stock has ceased to be traded on the New York Stock Exchange.

Danaher is a manufacturer of professional instrumentation, industrial technologies, and tools and components.

Sybron and its subsidiaries are manufacturers of both a broad range of value-added products for the dental profession, including the specialty markets of orthodontics, endodontics and implantology, and a variety of infection prevention products for use by the medical profession.