Health Care Deal News: Spotlight on Medical Devices-December 2011
Bain Capital is acquiring Medtronic’s (NYSE: MDT) Physio-Control unit for $487.0 million in cash. Based in Redmond, Washington, Physio-Control is a provider of emergency medical response technology for use in the intervention and treatment of cardio-respiratory and other medical emergencies. This transaction gives Physio-Control the singular focus it needs to grow as a company, rather than as a unit within a larger medical technology conglomerate fighting for resources. Also, it dovetails with Bain’s 2010 acquisition of Air Medical Group, a provider of emergency medical transport. MDT had been looking to sell the unit since 2006. Nonequity financing for the deal is being provided by Citigroup Global Markets and RBC Capital Markets. Goldman Sachs is providing MDT with financial advice while Citigroup and RBC are providing similar advice to Bain Capital.
Affymetrix (NASDAQ: AFFX) is acquiring eBioscience, a San Diego-based provider of flow cytometry and immunoassay reagents for immunology and oncology research and diagnostics, for $330.0 million. The transaction is to be financed with 50% cash on hand and 50% in committed debt. This acquisition, valued at 4.5x revenue, expands AFFX’s molecular diagnostics business and diversifies its sources of revenue to complement its genomics business. The addition of eBioscience creates new commercial opportunities in post-genomic applications of immunology, oncology and diagnostics, among other areas. For the cash part, AFFX has received a fully underwritten senior secure financing commitment of $190.0 million, led by GE Capital. Houlihan Lokey and Jefferies & Co. provided AFFX and eBioscience, respectively, with financial advice on this deal.
In a deal worth $93.0 million, Landauer (NYSE: LDR) is acquiring IZI Medical Products from private equity firm Riverside Partners. Based in Baltimore, IZI provides medical consumable accessories used in radiology, radiation therapy and image-guided surgery procedures. This acquisition,valued at nearly 5.0x revenue, expands LDR’s radiology offerings and enlarges the company’s addressable market in the U.S. and international markets. The structure of the deal also provides LDR with a future tax benefit with a net present value of about $18.6 million. Financing for the deal was obtained through LDR’s existing debt, with a new $175.0 million revolving debt facility with a term of five years. Robert W. Baird & Co. provided LDR with financial advice on this deal...Want to read more? Click here for a free trial to The Health Care M&A Monthly and download the current issue today