Replies to post #96832 on Biotech Values

[DewDiligence]

COV Acquires SMTS for $25/sh in Cash

[That’s a 32% premium to yesterday’s closing price.]

http://finance.yahoo.com/news/Covidien-Announces-Definitive-bw-1611050565.html?x=0&.v=1

›Wednesday June 16, 2010, 7:00 am

DUBLIN & TROY, Mich.--(BUSINESS WIRE)--Covidien plc (NYSE: COV) and Somanetics Corporation (NASDAQ: SMTS) today announced that they have signed a definitive merger agreement under which Covidien will acquire all of the outstanding shares of Somanetics Corporation for $25.00 per share in cash, for a total of $250 million, net of cash acquired. This acquisition is consistent with the Covidien strategy to expand into adjacencies and invest in product categories where it can develop a global competitive advantage.

Somanetics is a leader in cerebral and somatic oximetry. The company had sales of $50 million in 2009 and has approximately 150 employees. Its INVOS® (In-Vivo Optical Spectroscopy) Cerebral/Somatic Oximeter, a noninvasive patient monitor, continuously measures blood oxygen levels in the brain and in the body of patients who are at risk for restricted blood flow so clinicians can detect and correct a variety of threatening complications. The INVOS System is the only commercially-available cerebral/somatic oximeter shown to improve patient outcomes.

“The acquisition of Somanetics will allow Covidien to broaden our product offerings and add another market-leading monitoring technology to its portfolio,” said Pete Wehrly, President, Respiratory & Monitoring Solutions, Covidien. “The Somanetics product line, which we currently distribute in Europe, will expand our presence in the operating room. The acquisition will help us achieve our mission of enhancing the quality of life and improving patient outcomes.”

“We are excited about joining Covidien and enabling Somanetics’ shareholders to realize enhanced value for their investment,” said Bruce Barrett, President and Chief Executive Officer, Somanetics. “We have enjoyed a strong, long-standing relationship with Covidien as the exclusive European distribution partner of our INVOS System. Our proprietary technology ideally complements Covidien’s portfolio of respiratory and monitoring products.”

Financial Highlights

Under the terms of the agreement, Covidien will pay $25.00 in cash per Somanetics share for a total of approximately $250 million, net of cash acquired. The combination with Somanetics will broaden Covidien’s product offerings and is expected to be accretive to both revenue and earnings growth rates over time.

The transaction, which will take the form of an all-cash tender offer by a wholly-owned subsidiary of Covidien, followed by a second-step merger, is subject to customary closing conditions, including receipt of certain regulatory approvals, and is expected to be completed by July 31, 2010. The Boards of Directors of both companies have unanimously approved the transaction. All of the directors and executive officers of Somanetics have confirmed their intention to tender all shares held by them into the offer. Once the transaction has been completed, Covidien will report the Somanetics business as part of its Oximetry and Monitoring product line in the Medical Devices business segment.

Assuming a closing on July 31, 2010, Covidien expects that this transaction will be dilutive to 2010 and 2011 GAAP earnings per share. On a Non-GAAP basis, excluding transaction, restructuring and other costs, the transaction is expected to be neutral to earnings per share in fiscal 2010 and slightly accretive to fiscal 2011 earnings per share.

About Covidien

Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in three segments: Medical Devices, Pharmaceuticals and Medical Supplies. With 2009 revenue of $10.7 billion, Covidien has 42,000 employees worldwide in more than 60 countries, and its products are sold in over 140 countries. Please visit www.covidien.com to learn more about our business.

About Somanetics

Somanetics Corporation develops, manufactures and markets the INVOS® Cerebral/Somatic Oximeter. The INVOS System is the only commercially-available cerebral/somatic oximeter with labeling for improved outcomes after surgery in patients above 2.5 kg. The INVOS System is the clinical reference standard in cerebral/somatic oximetry, with a 12-year market track record, more than 750 clinical references and implementation at approximately 800 U.S. hospitals. Somanetics also develops, manufactures and markets the Vital Sync™ System, a device that integrates data from bedside devices into a single system for enhanced patient assessment and decision making, data management and data storage. Somanetics supports its customers through a direct U.S. sales force and clinical education team. Covidien markets INVOS System products in Europe, Canada, the Middle East and South Africa and Edwards Lifesciences represents INVOS System products in Japan. For more information, visit http://www.somanetics.com/.‹

[DewDiligence]

Recent Biotech Buyouts

[Added COV-SMTS deal.]

 
 Acquired         Premium    Deal         iHub  
 Company  Buyer   to Market  Value  Date  Reference  
 GNLB     GSK       465%     $57M  10/08  #msg-33209281 
 MEMY     Roche     319%     $50M  11/08  #msg-33787598 
 KOSN     BMY       233%     $190M  5/08  #msg-29647147 
 MGRM     LH        171%     $155M  6/09  #msg-38960958 
 COLY     PFE       167%     $165M 11/07  #msg-24600805 
 NTMD     Deerfield 158%‡‡‡  $36M   1/09  #msg-35132470 
 EYE      ABT       149%   **$2.8B  1/09  #msg-34762429 
 IOMI     Intercell 147%     $190M  5/08  #msg-29232165 
 BTRX     Stiefel   136%     $150M  6/08  #msg-30201906 
 Tepnel   GPRO      126%     $132M  1/09  #msg-35221710 
 SGXP     LLY       119%     $64M   7/08  #msg-30547648 
 ENCY     PFE       118%     $350M  2/08  #msg-26978155 
 TRCA     Ipsen     104%     $660M  6/08  #msg-29795183  
 CRY.to   MDT        97%     $380M  9/08  #msg-32421462 
 Speedel  NVS        94%     $880M  7/08  #msg-30588524 
 MNT      JNJ        92%     $1.1B 11/08  #msg-33879830 
 MEDX     BMY        90%     $2.1B  7/09  #msg-39801273 
 SIRT     GSK        85%     $620M  4/08  #msg-28705020  
 CVTX     GILD     *‡76%     $1.4B  3/09  #msg-36225695 
 IDEV     ENDP     *†74%   *†$370M  1/09  #msg-34592416 
 LEVP     VPHM     ††73%   ††$510M  7/08  #msg-30704409 
 TARG     MDCO    ***72%     $42M   1/09  #msg-34774402 
 Ventana  Roche      72%     $3.4B  1/08  #msg-30912677 
 Jerini   Shire     *71%     $520M  7/08  #msg-30452872 
 APNO     Cell Bio   70%     $20M   9/09  #msg-43348606 
 AAH.AX   CEPH       69%     $207M  2/09  #msg-35956544 
 TLCR     Grifols    64%     $3.4B  6/10  #msg-50961841 
 FACT     ABT        64%     $450M  3/10  #msg-47606240 
 Acambis  SNY        64%     $550M  7/08  #msg-30990498 
 JAV      HSP        64%     $141M  4/10  #msg-48881292 
 SCRX     Shionogi   61%     $1.4B  9/08  #msg-31859174 
 BFRM     Merz       60%     $253M  1/10  #msg-45071380 
 ASPM     COV        56%     $210M  9/09  #msg-43348479 
 OSIP     Astellas   55%     $4.0B  5/10  #msg-50234451 
 IDMI     Takeda     55%     $75M   5/09  #msg-37898204 
 BSMD     MMSI       54%     $96M   5/10  #msg-50161877 
 ATSI     MDT        54%     $370M  4/10  #msg-49617936 
 ALO      KG       ‡†54%     $1.6B 11/08  #msg-33763449 
 MEDI     AZN      ‡‡53%     $15.2B 4/07  #msg-19020387 
 MLNM     Takeda     53%     $8.8B  4/08  #msg-28365383 
 PCOP     LGND    ***52%     $75M   9/08  #msg-32404474 
 CLZR     ELOS       51%     $65M   9/09  #msg-41293512 
 OMRI     JNJ      ‡*51%     $465M 11/08  #msg-33762745 
 IMCL     LLY     †††51%     $6.5B 10/08  #msg-32662830 
 MYOG     GILD       50%     $2.5B 10/06  #msg-13712121 
 MIL      Merck KGaA 50%*†*  $7.2B  3/10  #msg-47249493 
 CRGN     CLDX       50%     $40M   5/09  #msg-38262967 
 PHRM     CELG       46%     $2.9B 11/07  #msg-24645394      
 BRL      TEVA       42%   **$9.0B  7/08  #msg-30792830 
 MOGN     Eisai      39%     $3.9B 12/07  #msg-25163775  
 SGP      MRK        34%     $41B   3/09  #msg-36140327 
 HTRN     ENDP       34%     $223M  5/10  #msg-49838813 
 SMTS     COV        32%     $250M  6/10  #msg-51344183 
 CGPI     Galderma   30%     $420M  2/08  #msg-28286522 
 WYE      PFE        29%     $68B   1/09  #msg-35077617 
 APPX     Fresenius †29%     $940M  7/08  #msg-30498388 
 WX       CRL        28%     $1.6B  4/10  #msg-49416197 
 SEPR     Dainippon  28%     $2.6B  9/09  #msg-41143301 
 Zentiva  SNY      ‡‡26%     $2.6B  9/08  #msg-32327005 
 NOVN     Hisamitsu  22%     $428M  7/09  #msg-39515681 
 EVVV     COV        19%     $2.6B  6/10  #msg-50797343 
 ACL      NVS     *‡‡17%  *‡‡$49.7B 1/10  #msg-45072999 
 CGRB     JNJ        16%     $970M  5/09  #msg-38039851 
 DNA      Roche      16%   †*$46.8B 3/09  #msg-36224175 
 ARI.to   Roche     ‡15%     $190M  7/08  #msg-30904056 
 SENO     BCR        14%     $213M  5/10  #msg-49838776 
 CEGE     BPAX        6%     $38M   6/09  #msg-39163410 
 VXGN     OXGN       (4%)    $33M  10/09  #msg-42578130  
 AVGN     MNOV     †‡(7%)    $38M   8/09  #msg-40769841 
 PGLA     Avexa       ®         ®  12/08  #msg-34341452 
 NUVO     ARCA        ®         ®   9/08  #msg-32420015 
 NOVC     Transcept   ®         ®   9/08  #msg-31869987 
 VSGN     IPC*††      ®         ®   8/09  #msg-40603745 
  
 ®Reverse merger with private or non-US company.  
  
 ‡Number is misleading inasmuch as Arius announced in 
 May 2008 that it was pursued by an unnamed suitor. 
  
 ‡‡Premium relative to commencement of bidding. 
  
 ‡‡‡To be liquidated by Deerfield following failed merger with 
 Archemix; premium relative to 11/18/08 date of Archemix deal. 
  
 ‡†Based on closing price 8/21/08, the day 
 before KG announced initial buyout offer. 
  
 ‡*Based on 11/20/08 close. 
  
 †Premium reaches 63% if earn-out met. 
  
 ††Premium and deal value based on 0.45/sh of contingent payments. 
  
 †††Premium relative to 7/30/08 close, the 
 day before BMY announced first buyout offer. 
  
 †*Price for 44% of DNA not already owned. 
  
 †‡7% discount to market price excludes contingent payments. 
  
 *199% premium to volume-weighted 
 price during preceding 3 months. 
  
 **Deal value includes assumption of debt. 
  
 ***Premium and deal value exclude contingent payouts. 
  
 *‡Premium relative to 1/26/09, the day 
 before Astellas announced $16/sh offer. 
  
 *‡‡Price includes entire deal in three stages; 17% premium is the 
 blended avg price of NVS’ purchases ($164) relative to ACL’s market 
 price 4/4/08 immediately prior to announcement of first stage of deal. 
  
 *†Premium includes estimated value of contingent 
 payouts, but listed deal value excludes them. 
  
 *††IntelliPharmaCeutics. 
  
 *†*Relative to MIL’s price before announcement that co. was for sale.