Theragenics agrees to $68M buyout

Theragenics ($TGX) has finally agreed to sell itself to Juniper, a private equity firm, but the deal comes with a twist: The surgical device manufacturer can solicit competing bids through Sept. 6.

Theragenics, a maker of surgical devices and brachytherapy seeds to treat prostate cancer, announced in May that it was mulling an offer from Juniper of between $2.25 and $2.30 per share, which translates to between $69.9 million and $71.4 million, respectively. Juniper's winning bid announced Aug. 5 came in just under that, at $2.20 per share, though it is above the firm's initial per-share offer of between $2.05 and $2.10. It also reflects a premium over the company's $1.49 price per share prior to the announced discussions with Juniper.

CEO M. Christine Jacobs is expected to retire from the company once Juniper becomes the new owner. In a statement, she framed Juniper as "an experienced investor" that will keep Juniper's DNA customer focus "without the significant burden of public company costs."

If no viable competing offers come to the table before Sept. 6, then Juniper is expected to close its purchase by the 2013 fourth quarter. Chief Financial Officer Frank Tarallo would then become Theragenics' new CEO but also remain head of the brachytherapy business. Other heads of Theragenics' subsidiaries are expected to remain in their posts, the deal announcement notes.

Juniper created a separate affiliate--Juniper Investment--to be the official acquirer, and affiliates of Garrison Investment Group will also contribute equity. Additionally, Credit Suisse and Garrison affiliates will provide debt financing, Theragenics said.

Theragenics, based in Georgia, has struggled with recent declines in surgical product revenue. That, combined with the effects of the new 2.3% medical device tax, led to a small net loss in the 2013 first quarter. Executives are focusing on cutting costs, in part, by shifting much of their vascular access manufacturing to Latin America, with plans to close a plant in Garland, TX.

Alexis Michas, a managing member of Juniper Investment, said in a statement that his firm acknowledges that Theragenics' success "is driven by the efforts of its employees." But he noted that Juniper will also "be focused on delivering profitable growth" by giving customers what they need.

- read the release

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