Inverness to acquire ACON business unit for $175 million in cash, stock deal, settles patent suit

By E. Janene Geiss

Philadelphia, Feb. 24 - Inverness Medical Innovations, Inc. announced Friday that it will acquire ACON Laboratories, Inc.'s business that researches, develops, manufactures, markets and sells lateral flow immunoassay products in the United States, Canada, Western Europe, Israel, Australia, Japan and New Zealand.

The business to be acquired had 2005 revenues of $50 million and operating income of about $17 million, according to a company news release.

As part of the acquisition, Inverness will acquire a newly constructed manufacturing facility that is undergoing validation in Hangzhou, China.

The acquisition is expected to close in the first or second quarter with the Hangzhou manufacturing facility to be acquired through a separate closing expected to occur by the end of the second quarter of 2006, officials said.

The total purchase price for the acquired business, including the manufacturing facility, will be $175 million, subject to adjustment for working capital and net debt, with the company assuming, on a consolidated basis, up to $4 million in debt related to the Hangzhou facility, officials said.

Inverness said it will pay ACON about $75 million at closing and $20 million upon closing on the Hangzhou facility with the remainder of the purchase price to be paid on completion of certain milestones related to achievement of functional manufacturing targets related to the products sold in each of the territories.

The total purchase price will be paid by issuing a total of up to $50 million of Inverness common stock to ACON with the remainder of the purchase price being paid in cash, officials said.

"By acquiring the majority of the rapid diagnostic test business of ACON, who has proven to be an efficient manufacturer of both consumer and professional diagnostic products, we are adding significant revenues at attractive margins as well as manufacturing capabilities that will benefit us companywide," Ron Zwanziger, chief executive officer of Inverness, said in the release.

"We are also pleased to fully settle our infringement claims against ACON and that the strength of our patents will be validated in several key jurisdictions through the issuance of permanent injunctions including findings of infringement," he added.

In order to leverage ACON's operating philosophy, Inverness said it intends to continue the ACON business as a standalone sales unit operating through its existing distribution channels.

Inverness and ACON also expect to reach agreement to allow Inverness to acquire ACON's rapid diagnostic business in the rest of the world in about three years, subject to that business' satisfaction of certain future financial performance and operational conditions, officials said.

ACON, based in San Diego, is a worldwide provider of diagnostic test kits in the consumer, point-of-care and laboratory markets.

Inverness is a Waltham, Mass., biotechnology company that develops advanced diagnostic devices and is exploring new opportunities for its proprietary electrochemical and other technologies in a variety of professional diagnostic and consumer-oriented applications including immuno-diagnostics with a focus on women's health, cardiology and infectious disease.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.