Home Diagnostics signs definitive merger agreement with Nipro

Home Diagnostics, Inc. (NASDAQ: HDIX), a leading manufacturer and marketer of diabetes testing supplies, announced today that it signed a definitive merger agreement with Nipro Corporation (Tokyo Stock Exchange and Osaka Stock Exchange Ticker Code 8086), a global manufacturer and distributor of medical devices, pharmaceutical products and medical and glass products headquartered in Osaka, Japan, under which Nipro will acquire all outstanding shares of Home Diagnostics’ common stock, $.01 par value, for a cash purchase price of $11.50 per share (or aggregate consideration of approximately $215 million). The offer price represents an approximately 90% premium to the closing price of Home Diagnostics’ common stock on February 2, 2010, and an approximately 83% premium to Home Diagnostics’ average closing price for the preceding 90 days.

The two-step acquisition will be effected by means of a first-step, cash tender offer commenced by a wholly-owned subsidiary of Nipro for all of the outstanding shares of Home Diagnostics’ common stock, at $11.50 net per share in cash, followed by a second-step merger in which untendered Home Diagnostics’ shares will be acquired at the same $ 11.50 net cash price per share. All Home Diagnostics’ stock options and stock appreciation rights will receive cash equal to the excess, if any, of $11.50 over their exercise price.

The transaction has been approved by Nipro and the board of directors of Home Diagnostics. The tender offer, which will remain open for a minimum of 20 business days, subject to certain extensions as required by applicable law and the terms of the merger agreement, is subject to certain conditions, including the valid tender and acceptance for payment in the tender offer of a majority of the fully diluted Home Diagnostics common stock, the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Act, and other customary conditions. The tender offer is not subject to a financing condition.

Certain stockholders of Home Diagnostics, owning in the aggregate approximately 15% of Home Diagnostics’ outstanding common stock, have committed to tender their shares in the offer. Home Diagnostics has also granted Nipro a “top-up” option exercisable under certain circumstances to enable Nipro to own 90% of the fully diluted Home Diagnostics common stock and complete the second step of its acquisition of Home Diagnostics by means of a “short form” merger not requiring approval by Home Diagnostics’ stockholders. Nipro has also reserved the right to commence a “subsequent offering period” following the expiration of the initial tender offer period if Nipro then owns less than 90% of the fully diluted Home Diagnostics common stock.

The merger agreement permits Home Diagnostics’ board, under certain circumstances prior to the completion of the Offer, to enter into discussions and negotiations and furnish information to third parties who submit to Home Diagnostics unsolicited acquisition proposals which Home Diagnostics’ board of directors determines to be reasonably likely to lead to a superior offer and, thereafter, to terminate the transaction with Nipro and enter into a definitive agreement providing for a superior offer, subject to Nipro’s right to match or improve the terms of any such superior offer and further subject to the payment to Nipro of a $6,500,000 termination fee or reimbursement of certain of Nipro’s out of pocket expenses in other circumstances.

Joseph Capper, President and CEO of Home Diagnostics, said, “First and foremost, we are pleased to announce this transaction which provides a substantial current cash premium to our stockholders. We believe this transaction is also beneficial to our customers and suppliers because it greatly enhances Home Diagnostics’ capabilities by expanding our product offering and aligning our business with a global healthcare company.”

The parties expect the tender offer to commence on or about February 10, 2010. The tender offer will remain open for 20 business days from commencement, subject to extension under certain circumstances as required by applicable law and the terms of the merger agreement. Subject to the satisfaction of the conditions to the tender offer, the offer is expected to be consummated prior to the end of the first quarter of 2010.

With respect to the transactions, Raymond James Financial, Inc. is acting as financial advisor to Home Diagnostics; Satterlee Stephens Burke & Burke LLP is acting as legal advisor to Home Diagnostics; and Greenberg Traurig, LLP is acting as special M&A counsel to Home Diagnostics. Baker & McKenzie LLP is acting as legal advisor to Nipro Corporation.

SOURCE Home Diagnostics, Inc.


The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of News Medical.
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