A Medical Device Daily

Viasys Healthcare (Conshohocken, Pennsylvania) reported that it has agreed to acquire, by merger, all outstanding stock of Pulmonetic Systems (Minneapolis), for a cash consideration of $98 million.

Pulmonetic Systems’ assets will include about $8 million in net cash on the closing date, Viasys predicted, and it will finance the purchase with a combination of existing cash reserves and debt under its revolving credit facility.

Pulmonetic manufactures portable mechanical ventilators for home healthcare. In a statement, Pulmonetic said that its LTV ventilator was the first commercially available mechanical ventilator “to offer sophisticated respiratory modalities in a laptop-size device.”

The company’s LTV series “is complemented by a comprehensive line of patient circuits, accessories and options that meet the needs of both pediatric and adult patients,” it said, adding that it has become “the ventilator of choice for home care patients seeking true portability and a higher quality of life.”

Pulmonetic also said that it has several new products in development.

The company’s board has approved the merger, with the customary closing conditions requiring approval of its stockholders.

With the execution of the agreement, certain principal stockholders holding 39% of the outstanding stock of Pulmonetic said they would vote to approve the transaction. The companies said they expect the transaction to close in 2Q05.

Pulmonetic had annual revenues of about $42 million in 2004.

Ed Pulwer, group president of Viasys Respiratory Care, said that the acquisition would allow Viasys “to enter into a new market segment. Home care mechanical ventilation is one of the fastest-growing market segments in the global ventilation market. We expect that Pulmonetic Systems’ expertise in miniaturization will enhance the entire Viasys product portfolio.”

He added: “We believe that the combined strength of Pulmonetic Systems, with its recognized technical leadership in home mechanical ventilation, coupled with the strength of Viasys’ hospital brand names, such as Bear, Bird, EME and Sensormedics, will be an outstanding combination.”

Jim Hickey, president and CEO of Pulmonetic, said that the combination would produce an organization that will be “the hallmark for leadership in the mechanical ventilation industry.”

Viasys is a provider of respiratory, neurology, medical disposable and orthopedic products. The company’s businesses are conducted through Respiratory Care, NeuroCare, MedSystems and Orthopedics units.

In other dealmaking:

CAS Medical Systems (Branford, Connecticut) reported that it has acquired all of the outstanding capital stock of Statcorp (Jacksonville, Florida) for $4.2 million in cash, subject to performance-related adjustments. The purchase, CAS said, was funded by a seven-year, fixed-rate debt obligation between CAS Medical and its current lender.

Statcorp, a manufacturer of blood pressure cuffs, pressure infusor cuffs and blood filter products, recorded FY04 revenues of about $5.7 million.

“This acquisition significantly expands and improves our product offerings in blood pressure accessories markets,” said Louis Scheps, president and CEO of CAS. “With this acquisition, CAS enhances its position as a leader in non-invasive blood pressure monitoring by offering a complete, low-cost, high-performance accessories solution . . . to complement our proprietary monitoring products and OEM technology. Statcorp provides us with the expertise to manufacture high-quality, low-cost cuffs which we can sell through both existing and new channels.”

He added that the Statcorp buy “also opens new market opportunities through existing distribution with the pressure infusor cuffs and blood filter products.” He projected increased earnings as a result of the acquisition.

James Shepherd Jr., company co-founder, will remain with Statcorp as its president.

Statcorp, established in 1989, initially developed pressure infusors and evolved to specialize in the manufacture of blood pressure cuffs and blood filters.

CAS, founded in 1984, manufactures blood pressure measurement technology, vital signs monitoring and apnea monitoring equipment and products for neonatal intensive care.

• Magellan Biosciences (Chelmsford, Massachusetts), a provider of instruments, automated systems, and point-of-care products and consumables for biomedical research and clinical diagnostics, reported purchasing TekCel (Hopkinton, Massachusetts). Terms were not disclosed.

A developer of sample management and assay automation systems for biomedical research, TekCel employs about 35, all “expected to remain with the company,” it said.

“With the acquisition of TekCel, Magellan is now of sufficient scale to take advantage of opportunities that are beyond the reach of smaller enterprises,” said Robert Rosenthal, president and CEO of Magellan. “Our goal is to deliver consistent profitable growth through our own internal product development and selective acquisitions. Now, with revenues of nearly $50 million, we can afford to invest in the advanced systems and infrastructure necessary to build a world-class company.”

Rosenthal added: “Our scientists and engineers from across the company can now work together to share expertise, ideas, and technology platforms, opening up new frontiers for customers, and driving growth for Magellan.

For example, TekCel’s automation expertise will be useful to Dynex as it continues development of its next-generation automated microplate-based immunoassay workstations. TekCel will benefit from ESA and Dynex’s experience as TekCel explores how its secure sample-storage products may be used in the clinical market, particularly at labs conducting clinical trials.”

• Trimedyne (Irvine, California) said it has entered into an agreement with Northwestern University (Evanston, Illinois) to acquire an exclusive license to the Hydrostat technology invented by John Pandolfino, MD, and others of the gastroenterology department of the university’s medical school. Deal terms were not disclosed.

The Hydrostat measures the opening pressure (resistance) of the sphincter valve of the esophagus. If the resistance is too low, acid in the stomach may enter the esophagus causing gastro esophageal reflux disease (GERD).

Trimedyne said it has begun to develop a new, small laser and disposable fiber optic device to shrink the lower esophagus to tighten the sphincter and increase its resistance, preventing stomach acid from entering the esophagus. The Hydrostat indicates when the sphincter has been sufficiently tightened.

It said that its GERD laser treatment is being designed to be performed, on an outpatient basis, through a flexible endoscope.

Trimedyne manufactures lasers and proprietary fiber optic devices for a variety of minimally invasive surgical procedures.