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   Strategies & Market TrendsSpeculating in Takeover Targets

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To: richardred who wrote (2459)10/19/2010 7:59:11 AM
From: richardred
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Deal-Making in Medical Technology Sector Surpasses 2009 Level, Report Says
By David Olmos - Oct 19, 2010 12:01 AM ET

The value of mergers and acquisitions of medical technology companies in the first half of 2010 surpassed the total for all of 2009, driven by buyers’ taste for bigger deals of established companies, a report found.

Eighty-nine deals with a value of $16.9 billion were struck in the first half of this year in the U.S. and Europe, compared with 172 transactions worth $15.7 billion in 2009, according to an Ernst & Young LLP report released today. The 2010 totals exclude Swiss drugmaker Novartis AG’s proposed $28.3 billion offer to purchase Nestle SA’s majority stake in Alcon Inc., the eye-care company, Ernst & Young said.

Deals should remain brisk in 2010’s second half, as shown by St. Jude Medical Inc.’s proposed $1.08 billion acquisition of AGA Medical Holdings Inc., announced yesterday, said John Babbitt, head of Ernst & Young’s medical technology practice in the Americas, in a telephone interview. Activity in 2010 may approach $30 billion, about double the value of 2009 deals, which was the lowest since 2002, the report said.

“We’ll probably see more deals of $1.5 billion and below,” said Les Funtleyder, a health-care portfolio manager at Miller Tabak & Co. in New York. Mergers and acquisitions will likely increase in the fourth quarter of this year, as companies try to get transactions completed by year’s end, he said.

There have been 240 deals in the last five years in the medical-device sector, with an average deal value of $369.5 million and an average premium of 41.8 percent, according to Bloomberg data. The biggest deal was Boston Scientific’s 2005 acquisition of Guidant Corp. for $25.2 billion.

Merck KGaA Deal

Much of the gain in 2010’s deal volume came from one transaction, Darmstadt, Germany-based Merck KGaA’s $6.8-billion acquisition in July of Millipore Corp., the supplier of biotechnology equipment based in Billerica, Massachusetts.

“We’re seeing fewer but larger deals,” said Babbitt, of the accounting firm, noting that investment has shifted away from early-stage companies.

“The real interest has been in buying mid-tier medical technology companies that have attractive valuations,” Babbitt said. “They are folding them into leaner and more efficient structures that the larger medical technology companies now have.”

Besides Merck, some of the bigger deals in 2010 have been Dublin-based Covidien Plc’s $2.5 billion acquisition of heart- device maker ev3 Inc. in July, and Minneapolis-based Medtronic Inc.’s $350-million acquisition of Invatec, an Italian maker of heart devices, in April.

“I don’t think we’re going to see a Guidant-size deal,” Funtleyder said, referring to the rest of this year.

The report defines the medical technology sector as companies including those that make medical devices, imaging technology such as magnetic-resonance imaging scanners, non- imaging diagnostic gear and equipment used in scientific research.

To contact the reporter on this story: David Olmos in San Francisco at

To contact the editor responsible for this story: Reg Gale at

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To: richardred who wrote (2458)10/19/2010 8:15:07 AM
From: richardred
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Opto Circuits to Acquire Cardiac Science

Press Release Source: Cardiac Science Corporation On Tuesday October 19, 2010, 6:15 am EDT

BOTHELL, Wash. and BANGALORE, KARNATAKA, India, Oct. 19 /PRNewswire-FirstCall/ -- Cardiac Science Corporation (Nasdaq:CSCX - News) and Opto Circuits (India) Limited [BSE Code: 532391; NSE: OPTOCIRCUI] today announced they have entered into a definitive merger agreement under which Opto Circuits has agreed to acquire all of the outstanding shares of Cardiac Science common stock for $2.30 USD per share. The $2.30 price represents a 10% premium to the closing price of Cardiac Science common stock of $2.10 on October 18, 2010, a 28% premium to the average closing price for the 30 day period ended October 18, 2010 and a 30% premium to the average closing price for the 100 day period ended October 18, 2010.

"We believe this transaction provides excellent value to our shareholders and expanded opportunity for our customers, employees, and partners," said Dave Marver, Cardiac Science president and chief executive officer. "Our business will benefit greatly from Opto Circuits' financial resources, operational capabilities, and global scale."

"We are delighted to expand our presence in noninvasive diagnostic monitoring through this acquisition and are excited to enter the high-growth automated external defibrillation market," said Vinod Ramnani, Opto Circuits chairman and managing director. "Cardiac Science has a strong reputation for innovative, high-quality products and services. This transaction is expected to open many new global markets for Cardiac Science's products and will greatly enhance Opto Circuits' product offering and presence in the United States."

Piper Jaffray acted as financial advisor to Cardiac Science and delivered a fairness opinion to Cardiac Science's board of directors. Perkins Coie LLP served as outside legal counsel to Cardiac Science, while Quarles & Brady LLP served as outside legal counsel to Opto Circuits.

About the Transaction

The boards of directors of both companies have unanimously approved the transaction, which 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 closing of the tender offer by Opto Circuits, which is expected to be commenced within 10 business days, is subject to customary conditions, including that shares representing at least sixty percent (60%) of Cardiac Science's outstanding shares of common stock are validly tendered into the offer. As a result of the second-step merger, any shares that have not been validly tendered into the offer will be converted into the right to receive cash equal to the offer price of $2.30 per share. The subsequent closing of the merger may be subject to obtaining stockholder approval of the merger agreement if Opto Circuits does not acquire a sufficient number of shares to effect a short-form merger. If such approval is needed, Cardiac Science will call a special meeting of its stockholders. If a stockholder meeting is required to approve the merger, Opto Circuits has agreed to vote (or cause its acquisition subsidiary to vote) all shares of Cardiac Science it owns in favor of the merger. The companies are targeting a late fourth quarter 2010 closing, assuming satisfaction of closing conditions and successful execution of the tender offer process.

Upon completion of the merger, Cardiac Science will become a wholly-owned subsidiary of Opto Circuits. Opto Circuits will fund the purchase with its cash and credit lines.

About Cardiac Science

Cardiac Science develops, manufactures, and markets a family of advanced diagnostic and therapeutic cardiology devices and systems, including automated external defibrillators (AED), electrocardiograph devices (ECG/EKG), cardiac stress treadmills and systems, diagnostic workstations, Holter monitoring systems, hospital defibrillators, vital signs monitors, cardiac rehabilitation telemetry systems, and cardiology data management systems (informatics) that connect with hospital information (HIS), electronic medical record (EMR), and other information systems. The company sells a variety of related products and consumables and provides a portfolio of training, maintenance, and support services. Cardiac Science, the successor to the cardiac businesses that established the trusted Burdick®, HeartCentrix®, Powerheart®, and Quinton® brands, is headquartered in Bothell, Washington. With customers in more than 100 countries worldwide, the company has operations in North America, Europe, and Asia. For information, call 425.402.2000 or visit

About Opto Circuits

Opto Circuits (India) Ltd. (OCI) (BSE Code: 532391; NSE Symbol: OPTOCIRCUI) is an Indian MNC in the business of design, development, manufacture and marketing of healthcare equipment and interventional products. The product profile includes pulse oximeters, patient monitoring systems, sensors, digital thermometers, anesthesia and respiratory care equipment, stents, catheters and other innovative products. Some of the well-known brands marketed by Opto Circuits are Criticare, Mediaid, Unetixs and Eurocor. It is presently a Group of 14 companies with a consolidated total sales of USD $243 million/Rs.1077 crores (FY10) and it is headquartered in Bengaluru, Karnataka, India. Its key markets are the US, Europe and South East Asia. It was ranked as one amongst 200 Best Under a Billion companies in AsiaPac by Forbes Asia in 2009, 2008. Visit us at

Important Additional Information

The tender offer for the outstanding common stock of Cardiac Science referred to in this press release has not yet commenced. This press release is neither an offer to purchase nor a solicitation of an offer to sell any securities. The solicitation and the offer to buy shares of Cardiac Science's common stock will be made pursuant to an offer to purchase and related materials that Opto Circuits and a wholly-owned subsidiary of Opto Circuits intend to file with the Securities and Exchange Commission. At the time the offer is commenced Opto Circuits and its wholly-owned subsidiary will file a tender offer statement on Schedule TO with the Securities and Exchange Commission, and thereafter the Company will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully and considered before any decision is made with respect to the tender offer. These materials will be sent free of charge to all stockholders of the Company when available. In addition, all of these materials (and all other materials filed by the Company with the Securities and Exchange Commission) will be available at no charge from the Securities and Exchange Commission through its website at Investors and security holders may also obtain free copies of the tender offer documents, once available, from the information agent for the tender offer or by mailing a request to Cardiac Science Corporation, Attention: Investor Relations, 3303 Monte Villa Parkway, Bothell, Washington 98021.

Forward-Looking Statements

This release contains forward-looking statements regarding the proposed acquisition of Cardiac Science, the expected timetable for completing the transaction, future business prospects and market conditions and benefits and synergies of the transaction. Such statements are based on the current assumptions and expectations of Cardiac Science' and Opto Circuits' management and are neither promises nor guarantees. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. There can be no assurance that management's estimates of future results will be achieved. Actual results and performance may vary significantly from those expressed or implied in such statements. The actual results of the acquisition could vary materially as a result of a number of factors, including: uncertainties as to how many of Cardiac Science Corporation's stockholders will tender their stock in the tender offer; the possibility that competing offers will be made; and the possibility that various closing conditions for the transaction may not be satisfied or waived. Other factors that may cause actual results to differ materially include those set forth in the reports that Cardiac Science files from time to time with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2009 and quarterly and current reports on Form 10-Q and 8-K. These forward-looking statements reflect Cardiac Science Corporation's expectations as of the date of this document. Cardiac Science Corporation undertakes no obligation to update the information provided herein.

Contact Information:

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From: richardred10/19/2010 11:08:22 AM
   of 6287
MASSY ENGY : Massey Comments on Strategic Opportunities
10/19/2010 | 10:35 am

JULIAN, W.Va., Oct. 19 /PRNewswire/ -- Massey Energy Company (NYSE: MEE) today released the following statement in response to reports that the company is exploring strategic opportunities:

(Logo: )

(Logo: )

Our Board of Directors and management team are always focused on opportunities to create shareholder value. However, we do not comment on specific opportunities.

We are very proud of our company, our members, and our support of the communities in which we operate.

Massey Energy Company, headquartered in Richmond, Virginia, with operations in West Virginia, Kentucky and Virginia, is the largest coal producer in Central Appalachia and is included in the S&P 500 Index.

SOURCE Massey Energy Company

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To: richardred who wrote (2344)10/20/2010 10:41:15 AM
From: richardred
   of 6287
Three Likely Buyout Candidates in Tech
Credit Suisse says Novellus, Teradyne and Verigy could be targeted.

Credit Suisse

WE EXPECT AN INCREASED level of leveraged-buyout (LBO) activity in the market over the next few quarters and we think semiconductor-capital equipment (SCE) companies screen as attractive candidates for an LBO. If an LBO event occurred in SCE, we believe it could improve valuation multiples for the sector.

In particular, our multi-scenario, company-level LBO analysis for all the SCE stocks in our coverage universe suggests that Novellus Systems (NVLS), Teradyne (TER) and Verigy (VRGY) screen as the most likely LBO-takeover candidates from a valuation perspective. These three stocks show 22% to 56% upside in an LBO event under a stressed and baseline capital-expenditures scenario, and yet return 20% internal rate of return (IRR) to potential private equity buyers.

Verigy and Applied Materials (AMAT) may also be of interest from a strategy change perspective – in both cases, focusing on profitable product divisions by exiting unprofitable ones, optimizing operating expenses to stream line research and development, and pursue mergers and acquisitions for inorganic growth could be attractive options to increase share-holder value.

There is precedence for such restructuring – we note that Novellus and Teradyne management have driven such effective and notable restructuring activities in the last five years. The lithography sector ASML Holding (ASML) and Cymer (CYMI) screen as the least likely candidates for an LBO at current valuations.

Recently, there has been an increase in LBO activity in the stock market. We expect this may continue over the next several quarters. Last week, it was reported in the media that Seagate Technology (STX) may be in talks for an LBO by private-equity firms. There has been evidence of an improving high-yield debt market since the credit crisis two years ago.

Interest rates are at low levels, and talks of quantitative easing may allow a gradual increase in risk appetite by investors in pursuit of higher yields. While fundraising for private equity remains tough, funds raised in the bubble years of 2005-2007 are nearing the five-year mid-point of their 10-year terms.

Private-equity funds plan around a five-year horizon from entry to exit, implying there may be an increase in private-equity-driven LBO activity over the next two years as these funds near mid-life. Private-equity funds will likely not be keen to pay the 10 to 12 times enterprise value/earnings before interest, taxes, depreciation and amortization (EV/Ebitda) multiples of the last peak, but valuations in the semi-cap space have significantly compressed this cycle, and are now trading around five-to-six times EV/Ebitda, below the EV/Ebitda threshold that makes LBO scenarios more plausible.

-- Satya Kumar
-- Brandon Heiken

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From: richardred10/20/2010 12:00:04 PM
   of 6287
ARAY-new buy today at 6.33. Nice backlog-good balance sheet and good speculative appeal. Also highly speculative. CyberKnife looks to be gaining traction. Like the agreement with Siemens.

>Accuray recently collaborated with Siemens , under which, the latter acquired the rights to sell CyberKnife systems globally. Moreover, the company received Japanese regulatory clearance in August 2010 to market its CyberKnife G4 systems for non-invasive treatment of all tumor types.

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To: richardred who wrote (2332)10/20/2010 12:02:43 PM
From: richardred
   of 6287
ANGO-Added today, to my already established position at 14.31.

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To: richardred who wrote (2346)10/21/2010 12:16:05 PM
From: richardred
   of 6287
HUBG sold today at 33.04 for a gain of 28%.

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To: richardred who wrote (2447)10/22/2010 12:08:17 AM
From: richardred
   of 6287
GTC order filled today. Added more AIRT at 8.70.

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From: richardred10/22/2010 12:35:44 AM
   of 6287
Lilly’s Diabetes Setbacks May Spur Shopping Spree Beyond Amylin
By Catherine Larkin - Oct 22, 2010 12:01 AM ET

Eli Lilly CEO John Lechleiter

John Lechleiter, chairman, president, and chief executive officer of Eli Lilly & Co. Photographer: Jeff Kowalsky/Bloomberg

Eli Lilly & Co., under pressure to gain new products after setbacks this week with two diabetes drugs, may try to acquire its partner Amylin Pharmaceuticals Inc. or covet companies with more approved products.

With Amylin, Lilly would gain full control of the diabetes drug Byetta and a longer-acting version called Bydureon delayed Oct. 19 by U.S. regulators, said Seamus Fernandez, a Leerink Swann & Co. analyst. Lilly might try to acquire Cephalon Inc. or Endo Pharmaceuticals Inc. to expand its painkiller business, said Bill Tanner, an analyst at Lazard Capital Markets.

By 2013, Lilly loses patents on medicines responsible for almost half its revenue. The Bydureon rejection, which stalled a new revenue source for at least two years, was compounded Oct. 20 when the company halted tests on a second experimental diabetes medicine because it wasn’t effective. Lilly Chief Executive Officer John Lechleiter yesterday ruled out “large- scale combinations” while expressing interest in smaller deals.

“An outright acquisition of Amylin certainly could make sense” if Lilly thinks Bydureon will be approved, Fernandez said in a telephone interview from Boston. Amylin, based in San Diego, lost half its market value on Oct. 20 after the Food and Drug Administration requested a study of Bydureon’s effect on heart rhythm.

Amylin shares increased 45 cents, or 4.1 percent, to close at $11.48 yesterday in Nasdaq Stock Market composite trading, after a 46 percent plunge on Oct. 20. Indianapolis-based Lilly fell 51 cents, or 1.4 percent to close at $35.50 on the New York Stock Exchange.

40 Percent Premium

The average premium paid in the last 12 months for acquisitions of U.S. medical and biotechnology companies was 40 percent, according to data compiled by Bloomberg. That suggests Amylin may have cost $2.3 billion yesterday, excluding debt, compared with $3.4 billion before shares plunged this week. Lilly had $5.16 billion in cash to make deals as of June.

Other diabetes-drug developers led by Pfizer Inc. and Sanofi-Aventis SA, may also pursue Amylin at its bargain price, Fernandez said. Ray Kerins, a spokesman for New York-based Pfizer, the world’s largest drugmaker, didn’t return calls for comment. Jean-Marc Podvin, a spokesman for Paris-based Sanofi, said he doesn’t comment on market rumors.

“We are very satisfied with our current relationship with Amylin and their management team,” Mark Taylor, a Lilly spokesman, said yesterday in an e-mail.

“Executing our current business strategy, including working with the FDA to bring Bydureon to patients as quickly as possible, is the best way to increase value for our shareholders,” said Alice Izzo, an Amylin spokeswoman, in an e- mail.

Opportunistic Acquirers

While there is risk Amylin may be the target of an opportunistic acquirer, it’s not likely the company would solicit offers, said Howard E. Greene Jr., a co-founder who resigned from the board last year, in an Oct. 20 telephone interview.

“Whenever the stock gets whacked, you have to assume that some people are going to sharpen their pencils,” Greene said. “Two things happen: shareholders are mad, and companies with bundles of cash are standing on the sidelines, waiting for an opportunity.”

Lilly paid an undisclosed amount in July to buy closely held Alnara Pharmaceuticals Inc., the maker of a drug for pancreatic insufficiency. Lilly also said in March that it would pay an undisclosed amount to buy European rights to certain animal drugs from Pfizer and a manufacturing plant in Ireland.

“Our fundamental strategy remains intact,” Lechleiter said during a conference call yesterday. “We’re not interested in large-scale combinations. I think there are many other opportunities that I think we could consider along the lines of several that we have done this year.”

Investor Confidence

Lechleiter’s plan to stick to small purchases or licensing deals won’t give investors much confidence, said Barbara Ryan, an analyst with Deutsche Bank in New York, in a telephone interview.

“A lot of those companies will just be adding to the pipeline and they’re not going to be something that the market will accrue much value to on Lilly,” Ryan said.

United Therapeutics Corp. may also be a good fit because Lilly has an 11 percent stake and the two companies are partnered on Adcirca, a lung treatment made from the ingredient in Lilly’s impotence pill Cialis, according to Fernandez. Forest Laboratories Inc. would be another option to complement Lilly’s research in antidepressants and arthritis medicines, he said.

“It is not our expectation that we’re an imminent takeover target for Eli Lilly,” said Andrew Fisher, a spokesman for Silver Spring, Maryland-based United Therapeutics, in a telephone interview. The 2008 Cialis marketing agreement prevents Lilly from attempting a takeover before 2014, he said.

Company Comment

Cephalon doesn’t comment on rumor or speculation, said Candace Steele, a spokeswoman for the Frazer, Pennsylvania-based company. Kevin Wiggins, of Chadds Ford, Pennsylvania-based Endo, also declined to comment as a matter of company policy. Frank Murdolo, a spokesman for New York-based Forest, didn’t return a telephone message for comment.

The patent expires next year for Lilly’s top-selling antipsychotic Zyprexa, which brought in $4.92 billion last year. Generic copies of the antidepressant Cymbalta and insulin product Humalog may be introduced in 2013.

Had Bydureon been approved this week, it could have generated sales of $420 million next year, said Phil Nadeau, an analyst with Cowen & Co. in New York.

Tanner, of Lazard, estimates a fair price for Amylin would be as much as $15 a share, or about $2.16 billion based on 143.7 million shares outstanding as of June. He said Bydureon sales will be limited because there are at least six competing diabetes drugs in development -- including one from Lilly -- as well as one approved product, Novo Nordisk S/A’s Victoza.

“The chances that this drug makes it to market are probably pretty high, but you’re looking at almost two years from now,” Tanner said. “If it didn’t make it, then somebody would have massively overpaid for Amylin.”

To contact the reporter on this story: Catherine Larkin in Washington at

To contact the editor responsible for this story: Reg Gale at

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To: richardred who wrote (2462)10/22/2010 9:58:19 AM
From: richardred
   of 6287
UPDATE 2-GE to buy cancer diagnostics company Clarient

Fri Oct 22, 2010 8:54am EDT

* To pay $580 mln, or $5 per common share

* Sees growing molecular diagnostics market

* Clarient shares jump to $5.04, above offer price

* GE, other industrials step up dealmaking (Rewrites, adds stock action, other details, background)

NEW YORK, Oct 22 (Reuters) - General Electric Co (GE.N) extended this month's acquisition streak, agreeing to buy cancer diagnostics company Clarient Inc (CLRT.O) for about $580 million net of cash and investments in a deal that sent Clarient shares up 35 percent in premarket trading.

GE's Healthcare unit will pay $5 per common Clarient share or $20 per preferred share, the companies said. Clarient's molecular diagnostics technology allows pathologists and oncologists to identify cancers, a market expected to triple to $47 billion within five years.

Clarient, based in Aliso Viejo, California, recorded 2009 sales of $92 million, according to Reuters data.

Before the deal was announced, Clarient shares closed at $3.74 on the Nasdaq on Thursday at their best level in more than a year. In premarket trading on Friday, they hit $5.04.

Goldman, Sachs & Co. (GS.N) was the financial adviser to Clarient on this transaction, while JP Morgan (JPM.N) advised GE Healthcare. The deal is expected to close in late 2010 or early 2011. Stockholders holding about 47 percent of Clarient's outstanding Clarient stock have agreed to tender their shares.

Safeguard Scientifics Inc. (SFE.N), which owns 26 percent of Clarient shares, said separately it would get $145 million from the deal. [ID:nWNAB6273]


GE, the largest U.S. conglomerate, has said it could spend up to $30 billion on takeovers over the next few years, marking a return to the dealmaking track it had exited during the recession.

On Oct. 6, GE reached a $3 billion deal for Dresser Inc [DRESS.UL], which makes gas engines used in oil production and mining, and bought a $1.6 billion portfolio of retail credit cards from Citigroup Inc (C.N), in moves intended to boost its energy and GE Capital businesses. [ID:nN06287898]

GE is also among the suitors for BAE Systems' (BAES.L) aerospace unit that could fetch up to $2 billion. Other suitors include Honeywell International (HON.N) and United Technologies (UTX.N), people familiar with the matter said this week. [ID:nN19135803]

The Clarient acquisition was the latest deal among cash-rich multinational industrial companies.

Earlier on Friday, Caterpillar Inc (CAT.N) signed an agreement to acquire engine maker MWM Holding GmbH from British private equity firm 3i Group Plc (III.L) for about 580 million euros ($810 million) in cash. [ID:nSGE69L0EN]

Earlier this week, industrial conglomerate Danaher Corp. signaled it was ready to step up dealmaking, saying it has $4 billion in acquisitions capacity. [ID:nN18269431] (Reporting by Nick Zieminski, editing by Dave Zimmerman)

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