Opto Circuits (India) Ltd. (BSE:532391) entered into a merger agreement with Cardiac Science Corp. (NASDAQ:CSCX).
The Bangalore, India-based medical device developer plans to acquire Cardiac Science in an all-cash tender offer for $2.30 per share, a 10 percent premium over its Oct. 18 closing price and a 30 percent premium on CSCX’s average closing price over the last 100 days.
“This transaction is expected to open many new global markets for Cardiac Science’s products and will greatly enhance Opto Circuits’ product offering and presence in the United States,” Opto Circuits chairman Vinod Ramnani said in prepared remarks.
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The boards of both firms unanimously approved the transaction, which will be followed by a second-step merger. Before the deal can go forward, at least 60 percent of Cardiac Science shares must be tendered. If Opto Circuits does not acquire a sufficient number of shares to effect a short-form merger, Cardiac Science’s shareholders will need to approve the deal for it to proceed.
“We believe this transaction provides excellent value to our shareholders and expanded opportunity for our customers, employees and partners. Our business will benefit greatly from Opto Circuits’ financial resources, operational capabilities and global scale,” added Cardiac Science CEO Dave Marver.
The companies expect the deal to be complete by the end of the year.
Bothell, Wash.-based Cardiac Science’s share price took a hit after an April recall of its external defibrillators. The Food & Drug Administration warned that 280,000 external defibrillators with components made by Cardiac Science could malfunction, expanding a November 2009 recall. In June, Cardiac Science said it would replace 24,000 defibrillators implicated in the same recall because the device’s flaws could not be remedied with software patches.
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The company’s second-quarter earnings took big dip on an $11 million charge related to the recall. CSCX reported a net loss of $18.5 million, or 78 cents per diluted share, on sales of $36.1 million during the three months ended June 30, compared with a net loss of $2.1 million, or 9 cents per diluted share, on sales of $36.1 million during Q2 2009. Its Q3 earnings are due out at the end of this month.
The Massachusetts Medical Devices Journal is the online journal of the medical devices industry in the Commonwealth and New England, providing day-to-day coverage of the devices that save lives, the people behind them, and the burgeoning trends and developments within the industry.
