Cytyc Corp. to Buy Adeza Biomedical for $452 Million
Cytyc Corp. has agreed to acquire Adeza Biomedical, which markets tests for risk of preterm birth and infertility, for about $452 million to bolster Cytyc's portfolio, the companies said Monday.
Cytyc's $24-a-share offer represents a 55% premium over the $15.53 closing price of Adeza's shares Friday on the Nasdaq Stock Market.
Sunnyvale, Calif.-based Adeza Biomedical's chief products include a test marketed under the name FullTerm to identify pregnant women at risk of preterm birth, and an infertility test.
FullTerm currently generates about $50 million in annual revenue. But Cytyc said it believes the test's market potential is more than $500 million -- potential it hopes to unlock by using Cytyc's existing U.S. sales force of 250 people, and another 150 overseas.
"The FullTerm fetal fibronectin test offers an excellent complement to our diagnostic products portfolio and will allow us to leverage our formidable sales force, which is already calling on obstetricians and gynecologists, as well as commercial labs, in the U.S. and abroad," said Patrick Sullivan, Cytyc's chairman, president and chief executive.
Cytyc will pay for the transaction with cash on hand, an existing line of credit and cash on Adeza's balance sheet.
Cytyc's offer has been approved by Adeza's board, and is expected to close by the end of March, subject to approval by Adeza shareholders and other conditions.
The deal is expected to add at least 5 cents a share to 2008 earnings at Cytyc, whose products include tests for women's health conditions including breast and cervical cancers.
The transaction was announced about four months after a $519 million offer that Cytyc made to acquire Australia-based Vision Systems was trumped by a higher offer from another bidder, Danaher Corp..