SonoSite signs agreement to acquire privately held Visualsonics

SonoSite, Inc. (NASDAQ: SONO), the world leader and specialist in bedside and point-of-care ultrasound, today announced that it has signed an agreement to acquire privately held Visualsonics, a Toronto-based company focused on ultra high-frequency micro-ultrasound technology. The aggregate transaction value will be approximately $71 million net of cash and debt.

“We are excited to join forces with SonoSite, given their reputation and successful track record in market and product development. In working together, we look forward to creating imaging products that will benefit researchers, patients and healthcare professionals worldwide”

Visualsonics is the technology leader in real-time ultra high-frequency micro-ultrasound that presently serves the rapidly growing pre-clinical research market. Founded in 1999 by Stuart Foster, Ph.D., at Sunnybrook Health Sciences Center, Visualsonics' micro-ultrasound technology uses five times the center frequency range currently used in conventional ultrasound systems (40MHz versus 8MHz) and enables the visualization of superficial anatomy on small living animals with microscopic detail, discerning features as small as 40 microns (versus conventional ultrasound, which visualize 200 microns). Visualsonics' technology has the potential to pave the way for a new era of extreme high-resolution ultrasound imaging of superficial anatomy in clinical medicine.

"Visualsonics has developed potentially game changing ultrasound technology that breaks conventional barriers for visualizing superficial soft tissue," said Kevin M. Goodwin, SonoSite President and CEO. "Our intention is to integrate Visualsonics' micro-ultrasound technology with SonoSite's miniaturization competency and user design to deliver ultra high-frequency micro-ultrasound into clinical medicine."

Mr. Goodwin continued, "With the ability to image extremely superficial structures at 40 microns, we envision the technology being used in a wide array of clinical markets and applications. These include diagnostic radiology, neonatology, pediatric cardiology, orthopedic medicine, tissue regeneration, and dermatology for cosmetic and clinical disease management. We also see solid potential to continue expanding in pre-clinical markets, such as cardiovascular research, gene therapy, cancer and the overall evaluation of drug therapies."

SonoSite expects to benefit from Visualsonics' presence in the pre-clinical market. This market is estimated to exceed $350 million with a projected double-digit annualized growth rate. SonoSite plans to update its 2010 revenue and EPS guidance at the time of announcing its second quarter financial results on July 26, 2010.

Over the last decade, Visualsonics has successfully formed relationships with world class universities, medical institutions, and pharmaceutical and biotechnology companies around the globe. Researchers at Cambridge Research Institute, Stanford University, Harvard University, Chinese University of Hong Kong and Cedars-Sinai Medical Center have employed Visualsonics' ultra high-frequency micro-imaging technology to perform research studies in cardiovascular health, cancer, developmental growth and regenerative medicine. With the ability to visualize microscopic structures, researchers are able to study hemodynamics (blood flow), and the effects of various drug therapies on genetically engineered mice that are bred to have the same physiological disposition as a human.

"We are excited to join forces with SonoSite, given their reputation and successful track record in market and product development. In working together, we look forward to creating imaging products that will benefit researchers, patients and healthcare professionals worldwide," said Anil Amlani, Visualsonics President and CEO.

The acquisition is conditioned upon approval by Visualsonics' shareholders as well as the satisfaction of other customary conditions. Approval by SonoSite's shareholders is not required. SonoSite expects the acquisition to close in the next 30 days and following closing, Visualsonics will become a wholly-owned subsidiary of SonoSite.

In connection with the transaction, GCA Savvian acted as SonoSite's exclusive financial advisor. Fenwick and West LLC and Osler, Hoskin and Harcourt LLP, US and Canada respectively, acted as legal counsel to SonoSite.