May 21, 2007 / 12:14 AM / 12 years ago

Hologic to buy Cytyc for about $6.2 billion

NEW YORK (Reuters) - Women’s healthcare and diagnostics firm Hologic Inc. (HOLX.O) said on Sunday it has agreed to buy Massachusetts neighbor Cytyc Corp. CYTC.O for $6.2 billion in cash and stock in a deal that would more than double Hologic’s revenue.

The acquisition will expand Hologic’s product and geographic reach while providing cost-cutting opportunities. Hologic said the deal would make it one of the largest companies in the world focused on advanced technology in women’s health.

Hologic’s core business includes units focused on mammography, breast biopsy and osteoporosis assessment. Cytyc’s strengths include cervical cancer screening and preterm birth screening.

“Both Hologic and Cytyc provide some of the most advanced technology addressing women’s health needs,” said Jack Cumming, Hologic’s chairman and chief executive officer, who will be CEO of the combined firm.

Cytyc shareholders would receive 0.52 shares of Hologic common stock and $16.50 in cash for each share of Cytyc stock they own.

That represents $46.46 per share, or a 33 percent premium to Cytyc’s share price, based on the closing stock prices on Friday of both companies.

The deal must be approved by shareholders of both companies and federal anti-trust officials.


Hologic said the purchase, which is expected to close in the third calendar quarter, would add more than 10 cents per share to its consensus adjusted earnings in the first year after the close and add significantly more thereafter.

For the fiscal year ended September 2008, the companies forecast combined revenue in excess of $1.7 billion, and combined adjusted earnings per share of $2.35 to $2.40.

Prior to announcement of the deal, analysts’ average revenue call for fiscal 2008 for Hologic was $852.4 million, according to Reuters Estimates.

The transaction is expected to generate $25 million to $30 million in annual cost savings.

Hologic has secured debt financing for the cash portion of the deal from Goldman Sachs.

Goldman, Sachs & Co. is financial adviser to Hologic. Jefferies & Company, Inc. is providing a fairness opinion to Hologic. Morgan Stanley is lead financial adviser to Cytyc and JPMorgan Chase & Co. is co-financial adviser.

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