Novitron International Inc has signed an agreement to acquire substantially all of the assets of Rhode Island based Elan Diagnostics Inc, one of the leading suppliers of clinical chemistry instrumentation, reagents and support resources predominately to the Physician's Office Laboratory (POL) market in the United States. EDx is an indirect wholly owned subsidiary of Elan Corporation plc, a fully integrated biopharmaceutical company headquartered in Dublin, Ireland.
For the period ending September 30, 2002, EDx had nine month unaudited revenues and operating income of approximately $22.2 million and $1.6 million, respectively. EDx sells its products predominately through a domestic network of national, regional, and local distributors supported by an internal sales force. As part of the transaction, Novitron will also acquire the assets of EDx's reagent assay manufacturing facility in Brea, California.
Under the terms of the agreement, Novitron International or Group Practice Services Incorporated (GPSI) will pay a total consideration of $14.6 million, in cash, for substantially all the assets of EDx and shall assume substantially all the liabilities of the business. As previously announced on November 15, 2002, GPSI, one of the leading POL management services companies, has signed a letter of intent to be acquired by Novitron. GPSI and Novitron have agreed that the EDx transaction was a corporate opportunity of GPSI and until the earlier of the closing of Novitron's acquisition of GPSI or the acquisition by Novitron of the EDx assets, GPSI retains the right to acquire the assets of EDx and reimburse Novitron for all of its expenses in connection with the EDx acquisition.
The purchase price for the assets of EDX may be subject to an adjustment based upon the value of assets at closing. The transaction is also subject to certain customary conditions and is expected to close in the first quarter of calendar 2003. EDx currently employs approximately 110 persons, almost all of whom will be offered employment with the new company.
Israel M. Stein, President of Novitron commented, "Elan Diagnostics is a strong strategic fit, providing a domestic network necessary to support our growing U.S. presence. The acquisition of the assets of EDx is a part of our recently announced plan to provide a full range of products and services to the growing U.S. POL market and to smaller laboratories internationally."
Dr. Stein continued, "We believe that the synergies created by this acquisition, which is part of the announced acquisition of GPSI, will allow us to craft innovative solutions for a variety of customers. The resulting integrated company will be capable of supplying a complete range of products and services, from equipment and reagents to lab management and consulting services, targeted to small and medium sized medical laboratories, both domestically and internationally. Whether a physician practice, clinic, or small hospital is considering establishing a new lab, consolidating lab resources from multiple sites, or upgrading the quality and efficiency of an existing laboratory, we anticipate that the combined companies will have the necessary expertise to assist with technology, regulatory affairs and management."