Hologic, Inc., a leading provider of state-of-the-art diagnostic and digital imaging systems directed towards women's health, has entered into a definitive agreement to acquire Suros Surgical Systems, Inc., a leading innovator in the field of devices used for minimally invasive biopsy and tissue excision.
The transaction will be structured as a merger of a Hologic acquisition subsidiary into Suros Surgical, whereby Suros Surgical will become a wholly-ownedwholly owned subsidiary of Hologic.
The purchase price for the transaction will be $240 million (subject to adjustment), plus a two-year earn out. The closing consideration will consist of $132 million in cash and an additional $108 million payable, at the election of Hologic, in cash, shares of Hologic Common Stock or a combination thereof. The earn-out will be payable in two annual cash instalments equal to the incremental revenue growth in Suros Surgical's business in the two years following the closing. This transaction is expected to close by the end of the second calendar quarter and will be subject to customary closing conditions, including Suros Surgical stockholder approval and the expiration or termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act.
Suros Surgical Systems, Inc. is a privately held, Indiana-based manufacturer of minimally invasive surgical technologies focused on breast biopsy and tissue removal. Suros Surgical's ATEC (Automated Tissue Excision and Collection) line of products, include percutaneous, automatic vacuum assisted breast biopsy systems, ancillary breast biopsy devices and biopsy site markers. In addition to more conventional image guidance compatibility, the ATEC system has become the market leader in MRI guided breast biopsy technology as well.
"The agreement to acquire Suros Surgical supports our strategy of maintaining our leadership position in women's healthcare initiatives," Jack Cumming, Hologic's Chairman and Chief Executive Officer said adding, "Biopsy is the most widely accepted method for determining the presence or absence of cancer following detection of a breast abnormality. An estimated 1.8 million biopsies were performed last year in the United States of which approximately 80% revealed benign lesions. The availability of minimally invasive needle biopsy has lowered the number of open surgical procedures performed over the last decade, giving women an improved and more preferred choice in diagnosing breast cancer. This acquisition should further strengthen our capabilities within women's healthcare by enabling our sales force to offer customers a comprehensive portfolio of product offerings in breast cancer detection."
Suros Surgical's revenue in calendar 2005 was approximately $27.2 million, representing 71% growth over the previous year. Hologic expects sales related to this acquisition in the 2006 calendar year to be in excess of $40 million and for the transaction to be accretive to earnings in fiscal 2007, absent the amortization of intangibles related to this transaction, stated a release.