A Medical Device Daily
Refac (Fort Lee, New Jersey) reported that it has expressed interest in exploring an acquisition of OptiCare Health Systems (Waterbury, Connecticut), an affiliated company, in a stock transaction and that the companies have entered into discussions about the potential buy.
Refac also reported that it has entered into acquisition discussions with U.S. Vision (Glendora, New Jersey) another affiliated company, which is privately held and operates the sixth-largest retail optical chain in the U.S.
OptiCare, Refac and U.S. Vision all are controlled by Palisade Concentrated Equity Partnership, which owns about 84% of OptiCare's outstanding common stock, 90% of Refac's outstanding common stock and 88% of U.S. Vision's outstanding common stock.
Refac was incorporated in 1952 and for most of its history, was engaged in intellectual property licensing activities. During the period from 1997 to 2002, it also was engaged in product development and graphic design and had invested these creative resources, together with its licensing skills, in certain product development ventures.
In March 2002, Refac disclosed plans to reposition itself for sale or liquidation and by the end of 2002, it had disposed of all of its operating segments with the exception of its licensing business and it has limited the operations of that segment to managing certain existing license agreements and related contracts.
On Feb. 28, 2003, Refac completed a merger with a wholly owned subsidiary of Palisade in which Palisade acquired control of Refac and, in May 2003, Palisade increased its ownership to about 90% through an additional cash investment of $17 million.
At the time, Palisade had indicated that it intended to use Refac as a vehicle for making acquisitions and the purpose of the stock purchase transaction was to provide Refac with additional capital for making these acquisitions.
As of Dec. 31, 2004, Refac reported a net worth of just under $31.2 million, with about $29 million available for acquisitions.
U.S. Vision is a store-within-a-store retailer of optical products and services, with net revenues of about $128 million during its most recent fiscal year. It operates 518 locations in 47 states and Canada, consisting of 506 licensed departments and 12 freestanding stores.
"We are very excited about the possibility of combining these companies," said a representative of Palisade. "We are committed to the retail optical business through our control positions in OptiCare and U.S. Vision and believe that both of these companies have good potential for organic growth, which will be enhanced by Refac's strong financial condition."
"OptiCare's board of directors has formed an independent committee to consider, evaluate and negotiate the potential transaction and then make a recommendation to the board," said Christopher Walls, OptiCare's president and CEO.
OptiCare is an integrated eye care services company focused on vision benefits management and consumer vision services, including medical, surgical and optometric services and optical retail.
Siemens Medical Solutions USA (SMS; Malvern, Pennsylvania), a wholly owned subsidiary of Siemens (Munich, Germany), and CTI Molecular Imaging (Knoxville, Tennessee) reported that the antitrust waiting period under the Hart-Scott-Rodino clearance in relation to the tender offer to acquire all the issued and outstanding shares of CTI has been terminated.
The Federal Trade Commission has informed Siemens that the request for early termination of the 15-calendar-day waiting period was granted. SMS, through its wholly owned subsidiary, MI Merger, commenced on April 1 a tender offer for all of the outstanding shares of common stock of CTI for $20.50 per share, net to the seller in cash.
The tender offer is being made pursuant to the original agreement and plan of merger, first disclosed in March in a deal valued at $1 billion (Medical Device Daily, March 21, 2005). The tender offer remains open until April 28, unless extended. Following completion of the tender offer, any remaining shares of CTI will be acquired in a merger at the same price.
Following announcement of Hart-Scott-Rodino termination, CTI yesterday said that its annual meeting of stockholders, scheduled for April 26, will be postponed indefinitely, due to the recently announced merger plan, and will be canceled upon completion of the deal.
CTI is a major supplier of products and services for positron emission tomography, a diagnostic imaging technology for detection and treatment of cancer, neurological disorders and cardiac disease.
In other dealmaking news:
• Canglobe International (Edmonton, Alberta) has entered into an agreement to acquire a medical waste treatment facility located in Beiseker, Alberta, for C$4 million.
The facility, built in 1993, currently treats medical waste collected throughout Western Canada using the plant's incineration technology.
The company also has acquired alternative treatment equipment valued at C$1.25 million, which will allow the Beiseker facility to triple plant capacity within a three-month period, the company said.
The company said that the Beiseker facility will have the potential to generate about C$15 million in gross revenues per year.
The company noted that the acquisition of the Beiseker plant is the first step in obtaining what it said are "other environmentally friendly technologies," which will form the foundation for Canglobe to become a substantial player in the multi-billion dollar medical waste treatment industry.
• DST Systems (Kansas City, Missouri) said that one of its subsidiaries has entered into a definitive agreement with Computer Sciences Corp. (CSC; El Segundo, California) to acquire CSC's Health Plans Solutions (HPS) business for 7.129 million shares of CSC common stock.
HPS is an enterprise software developer, software application services provider, and business process outsourcer for the U.S. commercial healthcare industry.
HPS has 270 clients and its systems are used to provide claims administration services for about 24 million covered lives. HPS has about 700 employees in three principal locations: Birmingham, Alabama; Southfield, Michigan; and Cohoes, New York.
DST and CSC have agreed that the exchange value of the CSC shares at closing will be $45.53 per share. On that basis, HPS will also hold $224.6 million of cash at the time of the exchange.
DST believes that the HPS business will expand its presence in the healthcare processing services industry, which currently uses DST's AWD and Output Solutions products.
DST said it expects to record net income of about $50 million from the exchange of the CSC shares.
• Arcadia Resources (Southfield, Michigan), a provider of home care and staffing services, mail order pharmacy and durable medical equipment (DME), reported that it has acquired the assets of United Health Care Services (UHCS) through its Beacon Respiratory Services subsidiary. UHCS is a DME supplier focused on respiratory disease management with operations in Fort Myers and Port Charlotte, Florida.
Upon full integration of the acquisition, it is anticipated that Beacon Respiratory Services will operate the business under the Arcadia H.O.M.E. (home oxygen medical equipment) name.