A Diagnostics & Imaging Week

Inverness Medical Innovations (IMI; Waltham, Massachusetts) is on the M&A trail again.

After already making a string of acquisitions in the diagnostics space this year, it yesterday said it will acquire HemoSense (San Jose, California) in an all stock deal for $165 million.

Inverness said each holder of a share of HemoSense common stock will receive 0.274192 shares of Inverness common stock, which closed on Monday at $46.46 a share. This represents a 37.5% premium, based on the average trading prices of both companies over the last five trading days. The deal is subject to HemoSense shareholder approval as well as the satisfaction of regulatory and other customary conditions and is currently expected to close in the fourth quarter.

In May, IMI beat out rival Beckman Coulter (Fullerton, California) for the right to acquire Biosite (San Diego) for $92.50 a share. And last month it unveiled plans to acquire Cholestech (Hayward, California) for $326.3 million. In February, IMI acquired the assets of First Check Diagnostics (Lake Forest, California) for $25 million.

The purchase of Hemosense is structured as a tax-free reorganization, and it is expected to be slightly accretive in 2008 and accretive thereafter. The deal is subject to HemoSense shareholder approval as well as the satisfaction of regulatory and other customary conditions, and is currently expected to close in Q4. In connection with the merger, certain HemoSense stockholders have entered into voting agreements with Inverness under which they have agreed to vote 33 percent of the outstanding shares of common stock of HemoSense in favor of the transaction at the meeting of HemoSense stockholders.

IMI is a supplier of consumer pregnancy and fertility/ovulation tests and rapid point-of-care diagnostics.

Hemosense develops handheld blood coagulation monitoring systems.

In other dealmaking activity:

• Orbotech (Yavne, Israel) reported that it has signed a definitive agreement to acquire 3D — Danish Diagnostic Development (DDD; Hoersholm, Denmark), a company that develops gamma cameras for nuclear medicine.

Orbotech will pay about $39 million to the stockholders of DDD for the acquisition of all of the outstanding shares of the company. In addition, Orbotech will pay to the stockholders of DDD an earn-out, capped at about $6.5 million, based on DDD’s performance during the years 2007 and 2008. The acquisition will be financed from internally-generated funds.

DDD says it is the world’s largest manufacturer of cardiac gamma cameras, which it markets primarily in the U.S. through major industry suppliers that distribute them under their own brands.

Orbotech said it believes that this transaction has the potential to generate about $30 million in annual revenues, based on DDD’s current product offering and its short term research and development plans; and it is expected to be immediately accretive to Orbotech on a non-GAAP basis.

The transaction is expected to close immediately. Following completion, DDD will form part of Orbotech’s medical imaging operations.

DDD is a development and supply partner to the major OEMs worldwide which sell its products to privately practicing cardiologists and hospitals. Since 2004, the company has been principally owned by Axcel II, a Danish private equity fund. Operating from Denmark, DDD has 42 permanent employees.

• WellPoint (Indianapolis) reported the completion of its acquisition of American Imaging Management (AIM; Deerfield, Illinois), a radiology benefit management and technology company. AIM will remain headquartered in Deerfield, Illinois, as a wholly owned operating division of WellPoint and will continue to be led by its president, Dave Harrington.

AIM pioneered the integration of technology and clinical content for radiology management through the introduction of web-based prior authorization in 2002. This platform allows ordering physicians to directly submit information and receive real-time evaluation against widely accepted clinical guidelines through an easy-to-use interface, the company noted.

AIM serves health plan clients representing more than 20 million consumers. The acquisition of AIM will be accretive to earnings beginning in 2008, WellPoint said.

• The Gores Group (Los Angeles) said it has finalized its agreement with HealthSouth (Birmingham, Alabama) to buy its diagnostic division, creating Diagnostic Health, an independent diagnostic imaging company.

The deal was originally disclosed in April.

The new company is comprised of a network of 53 freestanding diagnostic imaging centers in 19 states and the District of Columbia. While not all services are provided at all sites, 80% of the centers are multi-modality facilities offering a combination of outpatient diagnostic imaging services, including MRI, CT, X-ray and ultrasound.