Cardinal Health (Dublin, Ohio) yesterday morning reported that it plans to buy Viasys Health (Conshohocken, Pennsylvania) for about $1.5 billion and also assume Viasys debt of $50 million.

Cardinal will make a cash tender offer to acquire all outstanding shares of Viasys common stock for $42.75 a share, a 31.55% premium over its closing stock price of $35.55 on Friday.

With 2006 revenue of $610 million, Viasys is a global, research-based med-tech company focused on respiratory, neurology, disposable and orthopedic products.

Viasys stock jumped 37%, or $11.52, to a record $43.07 a share in early trading Monday. Cardinal shares rose 31 cents to $69.38 in trading Monday morning. Its shares have traded from $61.15 to $76.15.

Cardinal said the acquisition will expand its clinical and medical product offerings for global, acute-care customers and, combined with its respiratory products business, will establish the company as a leader in the more than $4 billion respiratory care market.

The acquisition will also provide a range of complementary products to Cardinal's medical disposables business, the company said, and will leverage its integrated hospital selling organization in the U.S. Worldwide, Viasys has more than 7,000 hospital customers in 100 countries and generates 40% of its revenue from customers outside the U.S., adding substantially to Cardinal's international presence, the company noted.

Kerry Clark, CEO of Cardinal, told conference call listeners Monday morning that the company had been watching Viasys "for some time" as a possible acquisition "because of its strong fit with Cardinal" and that the opportunity to buy Viasys presented itself just a couple weeks ago.

"Just about a month ago we first decided to go talk to Viasys to get to know them better, and then just within the last few weeks we learned that there was, in fact, another company that was planning to make an offer for Viasys and we had to make a decision to move quickly or not," Clark said. "Given that we had already done some homework on the company, we didn't want the opportunity to pass away."

During the company's conference Clark emphasized that synergies from the transaction are expected to reach $85 million to $100 million a year on a pre-tax basis by FY10, and that, as a result, the deal is expected to be accretive to earnings in FY09 and "meaningfully" accretive in FY10.

According to the company, Cardinal said that the acquisition will enable it to deliver comprehensive bedside, patient-safety offerings to acute-care customers; enhance its product and intellectual property portfolio; and realize synergies through existing capabilities and platforms.

Cardinal also reported its outlook for the current fiscal year, with non-GAAP diluted EPS from continuing operations expected to be $3.32 to $3.40. While the Viasys acquisition is expected to have up to a 10-cents dilutive impact on non-GAAP EPS in FY08, Cardinal reiterated the range it previously provided of $3.95 to $4.15, including the impact of the Viasys acquisition and use of proceeds from the recent sale of its Pharmaceutical Technologies and Services (PTS) segment to repurchase shares.

Cardinal completed the $3.3 billion sale of its PTS unit to Blackstone Group (New York) last month (Medical Device Daily, April 11, 2007).

Cardinal said there would be no changes to its current share repurchase plans. The company expects to complete the repurchase of $3.1 billion in shares with net proceeds from the PTS divestiture by the end of the first quarter of fiscal 2008, bringing repurchases since the beginning of fiscal 2007 to $4.1 billion. In addition, it does not expect the acquisition to alter its long-term repurchase plans, which it estimates will include up to an additional $1 billion repurchase of shares in fiscal 2008, subject to board approval.

"We have the capability to take this on right now, and we have the expertise to deliver the synergies, and finally we have the business momentum, cash-flow and balance sheet capacity to absorb this without changing our guidance, or share repurchase program," Clark said during the conference call.

In other dealmaking news:

• DocuSys (Mobile, Alabama), a provider of anesthesia information management systems (AIMS) and digital drug management systems, has licensed its AIMS technology to McKesson (San Francisco). McKesson gains the right to sublicense the current version of the DocuSys solution to its customers and provide ongoing development, maintenance and support.

DocuSys will receive royalties from McKesson for each sublicense and will continue to develop, market, maintain and support future versions of its software.

DocuSys said that the deal positions McKesson as its largest single customer to date.

• New England Biolabs (NEB; Ipswich, Massachusetts) said it has licensed the Ergo bioinformatics software developed and maintained by Integrated Genomics (Chicago). Financial terms were not disclosed.

NEB will use the ERGO genome analysis tools for gene annotation, metabolic reconstruction and enzyme data-mining as well as for comparative genomics purposes.

Optimized for analysis of microorganisms, Ergo integrates biological data from genomics, biochemistry, gene expression studies, genetics and literature. Ergo contains more than 1180 genomes at various stages of completion, as well as the largest available collection of networked cellular pathways.

• Montecito Medical Investment Company (MMIC; Santa Barbara, California) and ING Clarion Partners (New York) reported the acquisition of Vero Medical Suites (Vero Beach, Florida), a 39,966 square-foot medical office building across the street from the Indian River Memorial Hospital (Vero Beach, Florida).

Montecito said the acquisition is its 17th in the last 12 months, building upon a strategy to continue acquire medical properties in key markets across the country. Montecito and ING Clarion said they plan to accumulate 5 million square feet of medical properties over the next 12 months.