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Cytyc Corporation (Nasdaq: CYTC) today announced that it
plans to initiate a tender offer to acquire Vision Systems Limited
(ASX:VSL), an Australia-based, worldwide leading developer and
manufacturer of instruments and reagents for anatomical pathology. The
tender offer will take the form of an all cash offer of A$2.35 per
outstanding ordinary share of Vision ("Vision Share"), or a total
consideration of approximately A$497 million (US$374 million).
"Vision Systems is an exciting growth company with best-in-class
products for the global anatomic pathology market," said Patrick J.
Sullivan, Cytyc's chairman, president and chief executive officer.
"This acquisition offers unique and powerful synergies for both Vision
and Cytyc with no product overlap. Cytyc has demonstrated unparalleled
success in the anatomic pathology market with its ThinPrep(R) System.
Vision presents an ideal opportunity to leverage our sales, service,
and laboratory support infrastructure, which currently is more than
175 people worldwide. We believe that this sales force and
infrastructure will prove invaluable in supporting the adoption of
Vision's products around the world. The addition of the widely used
Novocastra(TM) branded antibodies to our portfolio as well as the
incorporation of Invetech, Vision's world-class product development
unit, will further strengthen Cytyc's position in the global
diagnostics market. Therefore, we believe Cytyc is in a strong
position to offer superior value to Vision shareholders while
generating an attractive return on investment for Cytyc shareholders,"
Mr. Sullivan concluded.
In connection with this transaction, Cytyc anticipates it will
incur certain one-time charges, which will be detailed at the close of
the transaction. Excluding transaction related expenses and
transaction amortization, Cytyc expects the acquisition of Vision to
be accretive to non-GAAP adjusted earnings per share in 2007. (See
Annex 1)
Morgan Stanley & Co. Incorporated has provided Cytyc with a
financing commitment, which along with Cytyc's available cash and
committed financing facilities, will be used by Cytyc to finance this
transaction.
DETAILS OF THE CYTYC OFFER
Cytyc is offering 100% cash consideration of A$2.35 for each
Vision Share (including Vision Shares that are issued upon the
conversion of Vision convertible notes)
This represents an attractive premium of:
-- A$0.71 or 43% to the volume weighted average price of Vision
Shares of A$1.64 on August 9, 2006, the last full day of
trading prior to the announcement of Ventana's proposal to
merge with Vision pursuant to the Merger Implementation
Agreement dated August 12, 2006 (the "Ventana Proposal");
-- A$0.84 or 56% to the volume weighted average price of Vision
Shares of A$1.51 for the one-month period up to August 9,
2006;
-- A$0.99 or 73% to the volume weighted average price of Vision
Shares of A$1.36 for the twelve-month period up to August 9,
2006.
Cytyc's offer is substantially unconditional
Cytyc's offer contains no financing condition, no minimum
acceptance condition and the offer is not subject to any regulatory
approvals or intervention such as potential intervention by the United
States Federal Trade Commission or the United Kingdom's Office of Fair
Trading. Cytyc's offer is subject only to the conditions of no
material adverse change and no prescribed events occurring in relation
to Vision during the offer period.
Cytyc's offer provides for early payment for the Vision Shares
Cytyc plans to pay the offer consideration within the later of (i)
5 days after a Vision shareholder has accepted the offer if the offer
is unconditional and (ii) 5 days after the offer becomes
unconditional.
Cytyc's offer is superior to the Ventana Proposal
Cytyc's offer delivers Vision shareholders and noteholders:
-- Superior price: A$0.22 or 10.3% above that offered by the
Ventana Proposal.
-- Substantially unconditional offer: Cytyc's offer is subject
only to the conditions of no material adverse change and no
prescribed events occurring in relation to Vision during the
offer period.
-- Early payment of offer consideration: Cytyc plans to pay the
offer consideration within the later of (i) 5 days after a
Vision shareholder has accepted the offer if the offer is
unconditional and (ii) 5 days after the offer becomes
unconditional.
MEDIA AND ANALYST BRIEFING
Cytyc management will discuss the Vision Systems transaction
during a conference call on September 14, 2006 at 8:30 a.m. (US
Eastern Time). The call will be hosted by Patrick Sullivan, chairman,
president, and chief executive officer; Tim Adams, chief financial
officer; and John McDonough, president, Cytyc Development Corporation.
A webcast and replay of the call may be accessed at Cytyc's website,
http://ir.cytyc.com, where the event will be available for replay
approximately two hours following the webcast until September 28,
2006. Those without web access may access the call by calling
877-407-9039 or 201-689-8470. A telephonic replay of the call will be
available through September 28, 2006, by calling 877-660-6853 (account
# 3055, conference ID # 214538). International participants may dial
201-612-7415; the account and conference ID numbers are the same.
ABOUT CYTYC CORPORATION
Cytyc Corporation is a leading provider of best-in-class medical
technology that enables physicians and laboratories to improve
patient's lives throughout the world. Cytyc provides diagnostic and
minimally invasive surgical products targeting cancer and women's
health. The ThinPrep(R) System is the most widely used method for
cervical cancer screening in the United States. The ThinPrep System
consists of the ThinPrep(R) 2000 Processor, ThinPrep(R) 3000
Processor, ThinPrep(R) Imaging System, and related reagents, filters,
and other supplies. The ThinPrep System also provides the platform
from which the Company launched its expansion into breast cancer risk
assessment with the FirstCyte(R) Breast Test. The MammoSite(R)
Radiation Therapy System is a single-use device for the treatment of
breast cancer that positions radiation sources directly into the
post-lumpectomy site to optimize radiation treatment delivery while
minimizing damage to healthy tissue. The NovaSure(R) Impedance
Controlled Endometrial Ablation System, or the NovaSure(R) System, is
an innovative endometrial ablation device to treat menorrhagia, or
excessive menstrual bleeding.
Cytyc is traded on The Nasdaq Stock Market under the symbol CYTC.
Cytyc, ThinPrep, NovaSure, MammoSite, and GliaSite are registered
trademarks of Cytyc Corporation.
ABOUT VISION SYSTEMS LIMITED
Vision Systems operates two core business units: Vision
Bio-Systems manufactures and markets automated instruments and
reagents for biopsy-based detection of cancer and infectious diseases
in pathology laboratories worldwide. Products include the Bond(TM)-maX
advanced staining system, the Peloris(TM) tissue processor, and
Novocastra(TM) antibodies and biochemical reagents. Income is
generated from capital equipment sales, visualization reagents to the
Bond system and Novocastra branded antibodies used in
immunohistochemistry for the identification of cancer and infectious
diseases.
The second business unit is Invetech, a worldwide provider of
research and development services for both internal and external
clients, primarily in the international healthcare sector.
During the fiscal year ended June 30, 2006, Vision Systems'
continuing overall sales increased to A$116 million (approximately
US$87 million), up 48% compared to the previous year, driven by
tremendous growth in the Vision BioSystems unit. The worldwide
anatomic pathology market is estimated to be US$1 billion and growing
at approximately 10 percent per annum.
FINANCIAL AND LEGAL ADVISORS
Morgan Stanley & Co. Incorporated and Thomas Weisel Partners LLC
are acting as financial advisors to Cytyc. Hogan & Hartson L.L.P. and
Clayton Utz are acting as legal advisors to Cytyc in the United States
and Australia, respectively.
FORWARD LOOKING STATEMENTS
Forward-looking statements in this press release are made pursuant
to the provisions of Section 21E of the Securities Exchange Act of
1934. Investors are cautioned that statements in this press release
which are not strictly historical statements, including, without
limitation, statements relating to Cytyc's future financial condition,
operating results and economic performance, and management's
expectations regarding key customer relationships, future growth
opportunities, product acceptance and business strategy, constitute
forward-looking statements. These statements are based on current
expectations, forecasts and assumptions that are subject to risks and
uncertainties, which could cause actual outcomes and results to differ
materially from those statements. Risks and uncertainties include,
among others, dependence on key personnel and customers as well as
reliance on proprietary technology, uncertainty of product development
efforts and product acceptance, management of growth, product
diversification, and organizational change, entry into new market
segments domestically and new markets internationally, risks
associated with litigation, the effective integration of acquired
businesses and technologies, competition and competitive pricing
pressures, risks associated with the FDA regulatory approval processes
and healthcare reimbursement policies in the United States and abroad,
introduction of technologies that are disruptive to Cytyc's business
and operations, the impact of new accounting requirements and
governmental rules and regulations, as well as other risks detailed in
Cytyc's filings with the Securities and Exchange Commission, including
those under the heading "Risk Factors" in its 2005 Annual Report on
Form 10-K and its most recent Quarterly Report on Form 10-Q filed with
the Commission. Cytyc cautions readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date
they were made. Cytyc disclaims any obligation to publicly update or
revise any such statements to reflect any change in its expectations
or events, conditions, or circumstances on which any such statements
may be based, or that may affect the likelihood that actual results
will differ from those set forth in the forward-looking statements.
Annex 1
"Non-GAAP adjusted earnings per share" is defined as earnings per
share as calculated in accordance with U.S. Generally Accepted
Accounting Principles ("GAAP EPS") excluding amounts related to the
following: effect of purchase price allocation on assets (including
write-off of in-process research and development, amortization of
identifiable intangibles, and effect of write-up of assets to
fair-market value), transaction-related expenses (including
integration costs), and other non-operating charges.
GAAP EPS cannot be estimated until after the closing of the
transaction when an independent valuation of the assets acquired and
liabilities assumed will be performed.