Healthcare equipment maker Opto Circuits (India) Ltd on Tuesday agreed to acquire US-based cardiology device maker Cardiac Science Corp. for $2.3 ('102.35) a share, gaining entry into the automated external defibrillation market.
This is the largest of Opto Circuits' nine acquisitions since 2001. Cardiac Science had 23.82 million shares outstanding as on Monday, valuing the buyout at $54.8 million, according to Reuters data.
A spokesperson for Opto Circuits put the total cost of acquisition, including employee severance payout and cost of debt, at $80-85 million. Cardiac Science expects to earn $145-150 million in revenue in 2010, according to Reuters.
“This transaction…will greatly enhance product offering and presence in the US,” Vinod Ramnani, Opto Circuits' chairman and managing director, said in a statement.
The market for automated external defibrillation systems, portable devices used to revive patients who have suffered a heart attack, is valued at $650-700 million and is growing at 7%, a spokesperson said.
The acquisition will take the form of an all-cash tender offer by a wholly owned subsidiary of Opto Circuits, followed by a second-step merger. The companies are looking to close the merger by the end of the year.
Opto's spokesperson said the buyout will be funded through a mix of 80% debt and 20% internal accruals.
Since 2001, Bangalore-based Opto Circuits has made nine acquisitions, including two this year. Factoring in these, Opto has forecast a 25-30% growth in revenue in fiscal 2011, with Unetixs expected to contribute around $8 million.
In 2009-10, Opto's revenue was '1,078 crore.
Source: American Chronicle