Combination to Accelerate Growth and Broaden Presence in Women's Health Market
BEDFORD, Mass. and MADISON, Wisc., June 9 /PRNewswire-FirstCall/ --Hologic, Inc. (Nasdaq: HOLX), of Bedford, Mass., announced today that it hassigned a definitive agreement to acquire Third Wave Technologies, Inc.(Nasdaq: TWTI) for a purchase price of $11.25 per share, or approximately $580million in value, representing an approximately 24% premium to Third Wave'saverage trading price over the last three months. The Boards of Directors ofboth companies unanimously approved the transaction in which Hologic is toacquire 100% of Third Wave's stock in a cash tender offer to be followed by amerger to acquire any untendered shares. The transaction, completion of whichis anticipated in the third calendar quarter of 2008, is expected to bemodestly dilutive to Hologic's adjusted earnings per share in the first fullyear after closing, and increasingly accretive thereafter.
Third Wave develops and markets molecular diagnostic reagents for a widevariety of DNA and RNA analysis applications based on its proprietaryInvader(R) chemistry. The company's current clinical diagnostic offeringsconsist of products for conditions such as Cystic Fibrosis, Hepatitis C,cardiovascular risk and other diseases. The company recently submitted to theU.S. Food and Drug Administration (FDA) pre-market approval (PMA) applicationsfor two human papilloma virus, or HPV, tests. These submissions are based ona successfully completed clinical trial. There are currently 10 million HPVtests being performed in the United States, representing a $200 million marketand growth in excess of 40% in each of the past five years. Hologic believesthe global market for HPV testing will increase to $800 million in the nextfew years.
Jack Cumming, Chairman and Chief Executive Officer of Hologic, said: 'Thecombination of Hologic and Third Wave brings together two great companies thatemploy complementary technologies but share a common mission: to help save thelives of women. Hologic is an established, diversified provider of diagnosticproducts and therapeutic devices. Third Wave's products in development,including its HPV tests, employ a patented molecular diagnostic platformdesigned to help identify cervical cancer and other diseases at an earlystage. This important transaction will broaden Hologic's range of diagnosticproduct offerings, enhance our revenue and earnings growth potential and, webelieve, create long-term value for our shareholders.
'Specifically, we expect our acquisition of Third Wave to help acceleratethe growth of our diagnostics division,' Mr. Cumming continued. 'Once FDAapproval is obtained, these products, will be a complementary fit with ourcurrent suite of products, and broaden our product offerings into high-growthdiagnostic markets for women.
'Hologic has an established sales and distribution network for women'shealth, as well as extensive relationships with clinical labs and OB/GYNchannels,' Mr. Cumming said. 'If and when Third Wave's HPV tests receive FDAapproval, which we hope will be in the first half of calendar 2009, we will bewell-positioned to take these products quickly and effectively to market. Weexpect the integration process to be smooth and seamless. We look forward towelcoming Third Wave's outstanding associates to Hologic when the transactionis completed, and to participating in the launch of Third Wave's existing andfuture product lines.
'We have great respect for Kevin Conroy and his team, the excitingproducts they have developed and the expertise they bring to Hologic. Beforeoffering to acquire Third Wave, we conducted extensive due diligence on thecompany's technologies, and believe that once FDA approval is obtained, theHPV test will represent an important new molecular diagnostic platform.Importantly, the senior management team of Third Wave is so confident aboutthe future of this technology that six top executives have voluntarilydeferred the vesting of their options and the acceleration of most of theirlong-term incentive plan payments otherwise due upon a change in control untilafter the receipt of FDA approval -- the strongest possible vote of confidencein Third Wave's technology and in this transaction, which we fully share,' Mr.Cumming concluded.
'We welcome this opportunity to deliver outstanding value to ourstakeholders,' said Kevin Conroy, Chief Executive Officer of Third Wave. Welook forward to working with Hologic to complete the transaction efficientlyand to delivering its benefits to our respective shareholders, customers,employees and to women worldwide.'
Benefits of the Merger
The anticipated strategic benefits of the transaction to Hologic include,among others:
-- Provides a solid platform for future opportunities in molecular diagnostics. Third Wave's unique Invader chemistry provides an exciting platform to explore new diagnostics for women's health. -- Accelerates Hologic's growth in cervical cancer screening. With a strong existing presence in cancer screening, the addition of Third Wave's HPV tests, subject to FDA approval, will allow Hologic to expand its ability to serve this important segment of the industry. Third Wave's pending HPV tests are a natural adjunct to Hologic's ThinPrep pap test. -- Broadens Hologic's presence in women's health. Subject to FDA approval, the addition of Cervista HR and Cervista 16/18 further broadens Hologic's comprehensive suite of products and diagnostic tests for women's health.
