A Medical Device Daily

Gardner Denver (Quincy, Illinois) reported that it has signed a definitive agreement to acquire Thomas Industries (Louisville, Kentucky), a maker of precision engineered pumps and compressors, for a purchase price of $40 a share for all outstanding shares and share equivalents, totaling about $734 million, and the assumption of $9.5 million of long-term capitalized lease obligations.

As of Dec. 31, Thomas had $267.1 million in cash, cash equivalents and short-term investments. The net transaction value, including assumed debt and net of cash, is about $476.4 million.

Thomas makes Rietschle Thomas brand pumps and compressors for use in global OEM applications, Welch laboratory equipment and Oberdorfer bronze and high-alloy liquid pumps. Thomas' products are sold into a broad range of end markets, including medical/laboratory, general industrial, printing, environmental and packaging.

Thomas has wholly owned operations in 21 countries on five continents.

"We expect the Thomas product portfolio to complement and enhance the Gardner Denver offering in terms of channels of distribution, applications and regions of the world served," said Ross Centanni, chairman, president and CEO of Gardner Denver.

Gardner Denver has received a debt commitment from Bear, Stearns & Co. and JPMorgan Chase Bank to fully finance the acquisition, but said it intends to finance the deal through an amended and expanded senior secured bank facility and a public offering of about $200 million of its common stock.

The company said it also may choose to access the debt capital markets.

Johnson & Johnson (J&J; New Brunswick, New Jersey) reported a definitive agreement under which it will acquire TransForm Pharmaceuticals (Lexington, Massachusetts), a privately held company that specializes in the discovery of formulations and novel crystalline forms of drug molecules.

The cash-for-stock transaction is valued at about $230 million and is expected to close in 2Q05, subject to customary closing conditions and regulatory approvals.

Upon closing, J&J is expected to incur an estimated one-time, after-tax charge of about $50 million, or 2 cents per share, reflecting the expensing of in-process research and development charges.

"TransForm is a strong, strategic addition to our pharmaceutical research, discovery and development model," said Harlan Weisman, MD, company group chairman, research and development, pharmaceuticals, at J&J.

He added: "The scientific expertise and intellectual property estate at TransForm provide value-creating opportunities across Johnson & Johnson's diverse pipeline, and immediately expand our ability to create new therapies. We are also excited about welcoming the talented people in TransForm's research laboratories who can bring creative solutions to some of our drug development challenges."

In other dealmaking news:

RoboDesign International (Carlsbad, California) reported that all of its outstanding shares have been purchased by Rigaku/MSC (The Woodlands, Texas).

RoboDesign is focused on the development of biotech and laboratory automation equipment and robotics, including integrated technologies for protein crystallization growth, storage, retrieval and imaging.

Waters Instruments (Minneapolis) reported that its board of directors adopted a shareholder rights plan designed to protect its shareholders from abusive takeover tactics and to preserve for its shareholders the long-term value of the company.

Jerry Grabowksi, Waters' president and CEO, said, "The rights plan is intended to assure fair and equal treatment for our shareholders in the event of a takeover and to encourage a potential acquirer to negotiate with the company's board of directors before attempting a takeover. The plan has not been adopted in response to any specific takeover threat or offer. It provides, however, a mechanism for the board of directors to negotiate a fair price for all shareholders at the company's true long-term value, should someone attempt to acquire the company."

Under the rights plan, Waters' board declared a dividend distribution of one right for each outstanding share of Waters common stock. Upon becoming exercisable, each right would entitle its holder to buy one one-100th of a share of a new series of preferred stock at an exercise price of $70 per right.

The rights will become exercisable if a person or group acquires 15% or more of the company's common stock or announces a tender offer for 15% or more of its common stock without prior board approval.

If, after a person acquires 15% without approval of the company's board of directors, Waters were to be acquired in a merger or similar transaction, each right would enable a shareholder to buy shares of the acquiring company having a market value of twice the right's exercise price, or, in effect, at a 50% discount to the market price.

The rights dividend distribution will be made on March 18 to shareholders of record as of the close of business on that date.

The rights will expire on March 17, 2015.

Waters' Medical Systems division manufactures renal perfusion devices for the organ preservation and transplant market and whole blood oximeter products that provide oxygen saturation information.