UPDATE 1-Merit Medical to acquire BioSphere in $96 mln deal

Thu May 13, 2010 5:26pm EDT

* Says deal to add to Merit's EPS from 2011

* Says all-cash transaction valued at about $96 mln

* Says cash payment of about $4.38/shr

May 13 (Reuters) - Medical device maker Merit Medical Systems Inc (MMSI.O) said it will acquire BioSphere Medical Inc BSMD.O in an all-cash deal valued at about $96 million, to obtain a platform for therapeutic technologies.

Under the terms of the agreement, BioSphere shareholders will receive about $4.38 per share for each outstanding share of BioSphere common stock, representing a 47 percent premium over the stock's Thursday closing price.

BiosPhere said it will also redeem all 9,636 currently outstanding shares of series A preferred stock at a price of $1,000 per share plus accrued but unpaid dividends.

Merit said the deal will hurt its earnings per share in 2010, but will add to earnings from 2011.

The company said it expects to cut extra expenses and achieve sales synergies by adding BioSphere products to its global sales channels.

The transaction is expected to close in the third calendar quarter of 2010.

Piper Jaffray & Co has been retained financial advisor to Merit, and J.P. Morgan Securities will serve as the financial advisor to BioSphere.

BioSphere also posted a narrower first-quarter loss of $1.23 million, or 7 cents a share applicable to common stockholders, compared with a net loss of $1.79 million, or 10 cents a share, a year ago. [ID:nWNAB0562]

Shares of Merit closed at $16.16, while BioSphere shares closed at $2.9 Thursday on Nasdaq. (Reporting by Krishnakali Sengupta in Bangalore; Editing by Roshni Menon)

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