A Medical Device Daily
Parentech (Solana Beach, California), a newborn and infant technology company, reported that it has completed a reverse acquisition of Bridgetech Holdings International (BHI), a company that is incorporated in Florida.
“It just makes sense for us to pursue the public market at this point in our growth,“ said Herbert Wong, Bridgetech's chairman. “The equity markets are just waking up to the potential for companies that are focused on delivery of products to China, not importing them from China. We believe there is probably a two- to three-year window of opportunity before everyone develops a strategy for pursuing the Chinese market, at which point it could a little late. Access to future mezzanine finance requirements as a public entity, should be easier and receive higher valuations.“
BHI was formed to leverage an extensive network of relationships throughout Asia and the world for select emerging medical device and technology companies, by providing not only the working capital necessary to bring their products to market, but immediate access to what the company thinks will become the largest economy in the world over the next 10 years.
Bridgetech has set up three core subsidiaries — Bridgetech Manufacturing; Bridgetech Distributing and Bridgetech Research and Development. Each is a stand-alone profit center that partners with appropriate Chinese businesses.
Under the terms of the reverse acquisition, Parentech's stockholders have an aggregate of about 1,817,000 shares of common stock of Bridgetech (Parentech changed its name to Bridgetech upon completion of the merger), reflecting roughly 20% ownership at closing. Bridgetech shareholders hold about 7,268,000 shares for a total of 9,084,932.
Following the reverse acquisition, the operations of Parentech were put into a subsidiary of Bridgetech. The company has entered into commitments with certain consultants to issue an aggregate of 1 million additional shares of the company's common stock, which will be issued following the closing.
Axtive (Dallas) reported the signing of a definitive agreement for the acquisition of Datatek Group (Phoenix), a subsidiary of Diversified Corporate Resources (DCRI; also Dallas).
Datatek is an information technology staffing services firm specializing in public sector healthcare solutions.
Axtive is paying $9.1 million in consideration for the Datatek assets and assuming specified liabilities. The purchase price is comprised of $4.5 million in cash and 15,333,333 shares of Axtive common stock valued at $4.6 million. Total cash paid at closing may be increased by up to $500,000, based on the amount of Datatek's accounts receivable.
“The acquisition of Datatek marks a major event in the evolution of Axtive,“ said Graham Beachum III, president and COO of Axtive. “This action is accretive on multiple levels in that it expands Axtive's existing professional services capabilities in the state, local and federal government IT services sector and enables our company to become a single source provider of resources and skills for the IT projects of our expanding client base.“
The acquisition is expected to close this month subject to receipt of required consents and other customary conditions.
The closing is subject to Axtive obtaining at least $6 million of financing. Additionally, DCRI must redeem a minimum number of shares of its preferred stock by agreeing to exchange shares of Axtive common stock to be received in the acquisition on terms satisfactory to DCRI.
Axtive is a holding company that currently provides system integration, web application development and managed hosting services to government and private sector clients in the middle market.
In other dealmaking news:
• Laboratory Corporation of America Holdings (LabCorp; Burlington, North Carolina) reported completing its previously disclosed acquisition of US Pathology Labs (US Labs; Irvine, California), a provider of anatomic pathology and oncology testing services with a focus on the outpatient market.
The deal, first disclosed in December (Medical Device Daily, Dec. 16, 2004), called for LabCorp to acquire all of the outstanding shares of US Labs for about $153 million in cash.
• Bad Toys Holdings (Kingsport, Tennessee) has completed the purchase of 92% of the issued and outstanding capital stock of Southland Health Services (Vernon, Alabama). Bad Toys Holdings anticipates acquiring the remaining 8% of the outstanding stock during 1Q05.
Bad Toys Holdings has acquired the 92% interest for an aggregate of $7,704,000 in stock and promissory notes issued by Bad Toys Holdings.
Southland provides various healthcare services including emergency and non-emergency ambulance service and related medical transportation services such as wheelchair-van and stretcher-van service. Southland plans to expand into other health care related services such as durable medical equipment and home healthcare in the near future.
The acquisition of Southland includes its subsidiaries Southland, Emergystat, Emergystat of Sulligent, Extended Emergency Medical Services and MedExpress.
Southland's gross revenues for the fiscal year ended Dec. 31 were $50.7 million.
Bad Toys Holdings is pursuing a new line of credit that it believes it will be obtained during the first quarter. The new working capital line is a principal component for funding current operations and future growth.
“The successful completion of this acquisition marks a milestone in the company's short history,“ said Larry Lunan, president and CEO of Bad Toys Holdings. The company said it plans to continue its aggressive M&A program in both of its business segments during 2005 to provide value and stability to its shareholders.
Bad Toys Holdings participates in two distinct business segments. The first business segment is the manufacturing and marketing of custom V-Twin motorcycles, street rods, and their component parts thru dealer networks and direct to retail customers. The second business segment that the company is engaged in is providing various healthcare services, including emergency and non-emergency ambulance service and related medical transportation services such as wheelchair-van and stretcher-van service.
Southland's existing credit line is provided by General Electric Capital Corp. As a condition of the acquisition, General Electric must be replaced by March 15.