Utah-based Merit Medical Systems (NASDAQ: MMSI) has agreed to acquire BioSphere Medical (NASDAQ: BSMD) of Rockland, MA, in an all-cash transaction valued at approximately $96 million. The merger agreement provides for a cash payment of about $4.38 per share for each outstanding share of BioSphere common stock, according to a Merit statement. The acquisition is the largest in Merit's 23-year history, the Salt Lake Tribune reports.
Merit will obtain a platform technology applicable to multiple therapeutic areas with significant market potential as a result of the acquisition. Two immediate applications for embolotherapy are uterine fibroids and primary liver cancer, which Merit believes represent worldwide market potentials of $650 million and $380 million, respectively. Embolotherapy has demonstrated compelling benefits to patients, physicians and payers.
"We believe BioSphere offers the most advanced embolotherapy technology available today and represents a valuable platform for therapeutic technologies," says Fred Lampropoulos, chairman and CEO of Merit. "We believe we can drive incremental use of the women's health and oncology applications among interventionalists, while providing significant benefit to patients. We anticipate that our ability to increase sales and create operational efficiencies will deliver enhanced value to our shareholders."
Lampropoulos added that Merit will be able to leverage its sales force to expand the distribution of its newly acquired BioSphere products, something that BioSphere had a difficult time doing with a sales staff of just 22, according to the Salt Lake Tribune.
"We are pleased to bring value to BioSphere shareholders through this planned acquisition. We look forward to effectively integrating into Merit, and we believe that this transaction will allow us to even more fully meet the needs of our customers," says Richard Faleschini, BioSphere's president and CEO.
Securities analyst Shawn Fitz of Stephens Inc. in Little Rock, AR, called the acquisition shrewd. "It moves Merit up the technological food chain, which is something they've been striving [to do] for a long time," he says, as quoted by the Salt Lake Tribune. But not everyone is happy with the proposed deal. Ryan & Maniskas, LLP has commenced an investigation into possible breaches of fiduciary duty and other violations of state law by members of BioSphere's board in connection with the merger agreement. In a statement, the firm questions whether the company undertook a fair process to obtain fair consideration for all shareholders of of the company.
At the same time BioSphere reported its financial results for the three months that ended March 31. Total worldwide revenue for the first quarter of 2010 was $7.12 million, compared with $7.28 million in the first quarter of 2009, a decline of 2 percent, the company says in a statement.
- check out BioSphere's release
- read Merit's release
- see the law firm's statement
- get more from the Salt Lake Tribune