February 3, 2010 / 11:59 AM / 10 years ago

UPDATE 3-Japan's Nipro to buy Home Diagnostics for $215 mln

* Offer at 90 pct premium to Tuesday close

* Expects to close the deal before end of Q1

* Home Diagnostics shares up 89 pct (Adds analyst comment, updates share movement)

By Anand Basu

BANGALORE, Feb 3 (Reuters) - Diabetes testing products maker Home Diagnostics Inc HDIX.O said it agreed to be acquired by Japanese medical devices company Nipro Corp (8086.T) for about $215 million.

Under the deal, Nipro will pay $11.50 for each Home Diagnostics share, representing a 90 percent premium to its Tuesday close.

“I think it’s a good deal, everybody has approved it. It’s in cash and there is no debt involved,” Dawson James Securities analyst Robert Wasserman said by phone.

Home Diagnostics makes blood glucose monitoring systems, while Nipro makes dialysis and cardiopulmonary-related products.

Barrington Research analyst Derek Leckow said Home Diagnostics will now get the opportunity to distribute its products in Japan, and Nipro would be able to launch its pump products in the U.S. market.

The deal, expected to close before the end of the first quarter, has been approved by Nipro and the board of Home Diagnostics, the company said.

Analyst Wasserman, who has a “buy” rating on Home Diagnostics shares, said it is a “done deal,” but there is a slight chance of another suitor.

The agreement permits Home Diagnostics, under certain circumstances, to enter into discussions and negotiations with third parties who submit unsolicited acquisition proposals.

“There is always a possibility (of another bid) especially in case where you have really no auction process,” said Barrington’s Leckow.

Nipro is also eligible to get a termination fee of $6.5 million.

Shares of Home Diagnostics were up 89 percent at $11.43 Wednesday on Nasdaq. They earlier touched a two-year high of $11.46. (Reporting by Anand Basu in Bangalore; Editing by Vinu Pilakkott and Aradhana Aravindan)

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