Advanced Medical Optics said on Monday that it will buy rival laser vision correction company IntraLase for about $808 million, or $25 a share.
The cash deal represents a 12.5% premium over IntraLase's closing price on Friday of $22.23 on the Nasdaq stock market.
Advanced Medical Optics (AMO) said it expects to complete the acquisition early in the second quarter of 2007.
The deal is subject to IntraLase stockholder approval, as well as regulatory approvals and other customary closing conditions, AMO said in a statement.
The news was first reported in Monday's edition of The Wall Street Journal.
AMO, of Santa Ana, California, is a global ophthalmology company with a near 60% share of the Lasik vision correction market, the Journal said.
IntraLase, based in Irvine, California, sells lasers that replace the hand-held blade traditionally used by eye surgeons in the first step of laser-assisted in-situ keratomileusis, or Lasik, the Journal reported.
AMO said it expects the transaction to dilute its adjusted earnings per share in 2007 but to add slightly to adjusted EPS the year after.
Including the acquisition, it forecast 2007 adjusted earnings per share of $1.40 to $1.55 on revenue of $1.15 billion to $1.18 billion.
It previously forecast $1.85 to $2 a share on revenue of $1.06 billion to $1.08 billion. Analysts polled by Reuters Estimates were expecting earnings of $1.79 a share on revenue of $1.05 billion.
For 2008, AMO forecast earnings per share of $2.25 to $2.40 on revenue of $1.35 billion to $1.37 billion. Analysts polled by Reuters Estimates were expecting $2.35 a share on revenue of
Investment bank UBS is acting as lead financial adviser and Goldman Sachs is acting as co-financial adviser to AMO. UBS also is the lead arranger on a $900 million acquisition facility for
AMO. Bank of America and Goldman Sachs are acting as joint arrangers for the facility.
IntraLase's lead financial adviser is Bank of America and JPMorgan is co-financial adviser.