Medical Innovations inked a $200 million deal that expands its coverage of ACON
Laboratories’ lateral flow immunoassay
diagnostic test kits to include the entire world.
In March 2006 Inverness took over this segment for the U.S., Canada, Europe (excluding Russia, the former Soviet Republics that are not part of the EU, and Turkey), Australia, Israel, Japan, and New Zealand. Under the terms of that deal, if certain financial and operating conditions were satisfied, Inverness would agree to sell ACON's products to the rest of the world.
Thus the current agreement gives Inverness rights in China, Asia Pacific, Latin America, South America, the Middle East, Africa, India, Pakistan, Russia, and Eastern Europe. The tests to be sold cover Inverness’ focus areas of infectious disease, cardiology, recreational drugs, and women's health. “ACON's 2008 revenues for this business were approximately $45 million at attractive operating margins,” according to Ron Zwanziger, Inverness CEO.
The acquisition is expected to close on or about April 30. Inverness expects to finance the transaction from cash-on-hand and its ongoing revenue streams. It does, however, have the ability to pay approximately 34% of the price in shares. The purchase price will be paid in a series of payments, the first to occur at closing and the last to occur in October 2011.
While Inverness takes over researching, developing, manufacturing, marketing, and selling these diagnostic kits, ACON will be left with in vitro diagnostics businesses in diabetes, clinical chemistry, and immunoassay products.