A Medical Device Daily

Urology services provider HealthTronics (Austin, Texas) reported that it will acquire Endocare (Irvine, California), a company focused on the development of minimally invasive technologies for tissue and tumor ablation, in a cash and stock deal worth about $16 million

Under the terms, Endocare shareholders can elect to get $1.35 a share in cash for each Endocare share, provided it does not exceed 50% of the total consideration.

The shareholders will also have the option to get 0.7764 shares of HealthTronics' stock, provided it does not exceed 75% of the total consideration.

The offer represents a 50% premium to the stock's closing price Friday on Nasdaq.

Prior to entering into the merger agreement with HealthTronics, Endocare terminated its merger agreement with Galil Medical (Yokneam, Israel) and the related private placement of its common stock. In November, Endocare agreed to buy privately held Galil in an all-stock deal (Medical Device Daily, Nov. 14, 2008).

The exchange offer is expected to be completed in 3Q09 HealthTronics said.

"We believe that by combining our two companies HealthTronics will solidify its position as the leading provider of products and services to the Urology community," said James Whittenburg, HealthTronics' CEO. "Endocare has long been an innovator in the field of cryosurgery, and we believe our companies share a common vision of providing physicians and their patients with the best available treatment options."

Whittenburg will be the CEO of the combined company.

The $16 million is significantly less than the $26.9 million that HeatlthTronics had offered for EndoCare back in August of 2008 (MDD, Aug. 8, 2008). That offer was withdrawn in September 2008 by HealthTronics with that company saying it had not heard anything from Endocare's board since the company rejected its original offer as "inadequate" in mid-August (MDD, Sept. 15, 2008).

Endocare has initially concentrated on developing cryoablation (freezing) technologies for the treatment of prostate cancer and believes that its proprietary technologies have broad applications across a number of markets, including the ablation of tumors in the kidney, lung and liver and palliative intervention (treatment of pain associated with metastases).

Aspen Advisors acted as financial advisor and Jackson Walker acted as legal counsel to HealthTronics. Oppenheimer & Co. acted as financial advisor and Gibson, Dunn & Crutcher acted as legal counsel to Endocare.

In other dealmaking news:

• AccuVein (Cold Spring Harbor, New York) reported signing a three-year agreement with Group Services for America's Blood Centers (GSABC; Washington), bringing the AccuVein AV300, a hand-held, non-contact vein illumination device, to GSABC member blood centers.

Under the agreement, GSABC will provide participating blood centers access to the AV300 to help locate hard-to-find veins. The AccuVein AV300 projects a pattern of light on a patient's skin revealing vein position to help the healthcare professional locate veins for blood draw (venipuncture).

"Providing the members of GSABC with the AccuVein AV300 is a big step towards reaching our goal - providing all health professionals with a device that may reduce time and effort in establishing an IV line," said AccuVein President Stephen Conlon.

"GSABC is committed to providing our members access to the latest technology - enhancing their centers and providing their donors with top-of-the-line service," said President Jerome Haarmann.

The device will be supplied by UnitedPharma, AccuVein's preferred distributor to America's Blood Centers.

• PTC (Needham, Massachusetts), which provides manufacturers with software and services to meet globalization, time-to-market and operational efficiency objectives of product development, reported that it has acquired Relex Software (Greensburg, Pennsylvania).

Relex provides software and services for analyzing design and field data in order to assist in evaluating and improving product reliability and safety. The company was privately held and has about 50 employees. Financial terms of the acquisition were not disclosed.

The Relex acquisition is a key component of PTC's product analytics strategy. Product development organizations are under constant pressure to comply with international environmental regulations, reliability and maintainability requirements, while lowering lifecycle and product costs. Decisions made to optimize one dimension are likely to impact performance on these other dimensions. These pressures are the impetus for PTC's product analytics strategy.

With product analytics software, PTC aims to provide a comprehensive solution to streamline prediction and analysis of product performance, provide visibility to product development stakeholders and enable effective tradeoff studies.

"The natural synergy between product lifecycle management and reliability engineering makes Relex a logical addition to PTC's evolving product analytics family of solutions and underscores PTC's holistic approach to product development," said James Heppelmann, president/chief operating officer of PTC.