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Hologic to acquire R2 Technology

Bedford, MassWednesday, April 26, 2006, 08:00 Hrs  [IST]

Hologic, Inc., a leading provider of state-of-the-art diagnostic and digital imaging systems directed towards women's health, announced that it has entered into a definitive agreement to acquire R2 Technology, Inc., a global expert in the field of computer-aided detection (CAD). The purchase price for the transaction will be $220 million (subject to adjustment) payable in shares of Hologic Common Stock. The price per share will be equal to the ten-trading day average of the closing price per share of Hologic Common Stock for the period ending two trading days prior to the closing date. This transaction is expected to close in the next two to three months, after completion of a fairness hearing before the Commissioner of the California Department of Corporations, and will be subject to customary closing conditions, including R2 stockholder approval and the expiration or termination of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act, a company release stated. R2 Technology, Inc., a privately held medical imaging company located in Sunnyvale, California, is a recognized leader in the development and commercialization of computer-aided detection (CAD), an innovative technology that assists radiologists in the early detection of breast cancer. R2 Technology pioneered the use of CAD for mammography in 1998 when the ImageChecker system became the first CAD system approved by the FDA for screening mammography. The ImageChecker CAD system was also the first system approved for use with digital mammography. "We are pleased to announce our intention to acquire R2 Technology," said Jack Cumming, chairman and chief executive officer. "This acquisition represents another significant step for Hologic in our strategy to provide added business value to our customers. R2 has over 2,500 mammography CAD installations worldwide, including over 1,000 digital CAD systems. We believe the mammography CAD industry was approximately $100 million in 2005 and that adoption of CAD will increase as a result of its clinical advantages and the increased adoption of digital mammography systems. We are confident the integration of R2's CAD systems with Hologic's mammography product portfolio will build a solid platform for future long-term growth." R2's revenue in calendar 2005 was approximately $45 million, essentially unchanged from the previous year. Hologic expects the market will shift away from analog or film based systems to CAD sold with digital mammography systems. This shift to digital CAD is expected to help improve margins overall as such margins are comprised primarily of software sales. Hologic expects this transaction to be accretive to earnings in fiscal 2007, excluding the amortization of intangibles related to this transaction. "Our technology is a powerful instrument in the early detection of those afflicted with cancer and other diseases," said John Pavlidis, president and CEO of R2 Technology, Inc. "We welcome our new partnership with Hologic and believe that this merger will help ensure that our CAD technology enjoys an even broader distribution to patients and physicians worldwide."

 
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