SonoSite Announces Definitive Agreement to Acquire Visualsonics
27 May 2010 - 9:00PM
Business Wire
SonoSite, Inc. (NASDAQ: SONO), the world leader and
specialist in bedside and point-of-care ultrasound, today announced
that it has signed an agreement to acquire privately held
Visualsonics, a Toronto-based company focused on ultra
high-frequency micro-ultrasound technology. The aggregate
transaction value will be approximately $71 million net of cash and
debt.
Visualsonics is the technology leader in real-time ultra
high-frequency micro-ultrasound that presently serves the rapidly
growing pre-clinical research market. Founded in 1999 by Stuart
Foster, Ph.D., at Sunnybrook Health Sciences Center, Visualsonics’
micro-ultrasound technology uses five times the center
frequency range currently used in conventional ultrasound systems
(40MHz versus 8MHz) and enables the visualization of superficial
anatomy on small living animals with microscopic detail, discerning
features as small as 40 microns (versus conventional ultrasound,
which visualize 200 microns). Visualsonics’ technology has the
potential to pave the way for a new era of extreme high-resolution
ultrasound imaging of superficial anatomy in clinical medicine.
“Visualsonics has developed potentially game changing ultrasound
technology that breaks conventional barriers for visualizing
superficial soft tissue,” said Kevin M. Goodwin, SonoSite President
and CEO. “Our intention is to integrate Visualsonics’
micro-ultrasound technology with SonoSite’s miniaturization
competency and user design to deliver ultra high-frequency micro-ultrasound into
clinical medicine.”
Mr. Goodwin continued, “With the ability to image extremely
superficial structures at 40 microns, we envision the technology
being used in a wide array of clinical markets and applications.
These include diagnostic radiology, neonatology, pediatric
cardiology, orthopedic medicine, tissue regeneration, and
dermatology for cosmetic and clinical disease management. We also
see solid potential to continue expanding in pre-clinical markets,
such as cardiovascular research, gene therapy, cancer and the
overall evaluation of drug therapies.”
SonoSite expects to benefit from Visualsonics’ presence in the
pre-clinical market. This market is estimated to exceed $350
million with a projected double-digit annualized growth rate.
SonoSite plans to update its 2010 revenue and EPS guidance at the
time of announcing its second quarter financial results on July 26,
2010.
Over the last decade, Visualsonics has successfully formed
relationships with world class universities, medical institutions,
and pharmaceutical and biotechnology companies around the globe.
Researchers at Cambridge Research Institute, Stanford University,
Harvard University, Chinese University of Hong Kong and
Cedars-Sinai Medical Center have employed Visualsonics’ ultra
high-frequency micro-imaging technology to perform research studies
in cardiovascular health, cancer, developmental growth and
regenerative medicine. With the ability to visualize microscopic
structures, researchers are able to study hemodynamics (blood
flow), and the effects of various drug therapies on genetically
engineered mice that are bred to have the same physiological
disposition as a human.
“We are excited to join forces with SonoSite, given their
reputation and successful track record in market and product
development. In working together, we look forward to creating
imaging products that will benefit researchers, patients and
healthcare professionals worldwide,” said Anil Amlani, Visualsonics
President and CEO.
The acquisition is conditioned upon approval by Visualsonics’
shareholders as well as the satisfaction of other customary
conditions. Approval by SonoSite’s shareholders is not required.
SonoSite expects the acquisition to close in the next 30 days and
following closing, Visualsonics will become a wholly-owned
subsidiary of SonoSite.
In connection with the transaction, GCA Savvian acted as
SonoSite’s exclusive financial advisor. Fenwick and West LLC and
Osler, Hoskin and Harcourt LLP, US and Canada respectively, acted
as legal counsel to SonoSite.
Conference Call Information
SonoSite will hold a conference call on May 27th at 1:30 pm
PT/4:30 pm ET. The call will be broadcast live and can be accessed
via http://www.sonosite.com/company/investors.
A replay of the audio webcast will be available beginning May 27,
2010, 5:30 pm PT and will be available until June 10, 2010, 9:59 pm
PT by dialing (719) 457-0820 or toll-free (888) 203-1112. The
confirmation code 8422187 is required to access the replay. The
call will also be archived on SonoSite’s website.
Acquisition Summary
- SonoSite signed a definitive
agreement to acquire Visualsonics for approximately $71 million net
of cash and debt.
- Following closing, which is
subject to approval of Visualsonics shareholders and other
customary closing conditions, Visualsonics will become a
wholly-owned subsidiary of SonoSite.
Expects Benefits of Acquisition
- Visualsonics is the technology
leader in real-time ultra high-frequency micro-ultrasound for the
growing pre-clinical research market.
- Visualsonics’ technology breaks
conventional barriers for superficial resolution and soft tissue
imaging.
- The acquisition has the
potential to develop major enhancements in the clinical
point-of-care ultrasound market, enabling expansion into new
clinical markets and applications that were previously thought
impossible.
- Access to world class
pharmaceutical and biotechnology companies, universities, and
medical institutions.
- SonoSite will utilize its ASIC
expertise to engineer advancements in size and cost for
pre-clinical ultrasound products.
- Visualsonics has a strong
product pipeline, high margin business and a recurring revenue
stream from service and accessories.
- The acquisition diversifies
SonoSite’s revenue base.
Financing
- The purchase price of the
acquisition will be paid from available cash on hand.
- SonoSite expects to payoff
Visualsonics’ debt of $8 million following the closing.
Financial Guidance Expected Impact
- Trailing twelve month revenues
were $30M and $5M of EBITDAS.
- Second half 2010 revenues of
$17M will be added through the acquisition.
- One-time charges of $5M will
occur after the acquisition.
- GAAP earnings will be dilutive
from non-cash stock compensation charges and intangible
amortization, while non-GAAP adjusted EBITDA will be neutral
through 2011 and accretive beginning in 2012.
- Visualsonics has $18.5M of net
operating loss carryforwards and $1.7M of tax credits available to
offset future Canadian taxable income.
Timing and Approval
- SonoSite expects the acquisition
to close in 30 days.
- The acquisition is conditioned
upon approval by Visualsonics’ shareholders as well as the
satisfaction of other customary conditions.
- Approval by SonoSite’s
shareholders is not required.
About Visualsonics
Visualsonics (www.visualsonics.com) is the leading developer of
high-resolution “in vivo” micro imaging systems devised
specifically for non-invasive small animal research. Micro
high-frequency ultrasound imaging allows the small animal
researcher to visualize in ways that were previously thought
impossible, and extremely difficult to achieve. Visualsonics’
flagship product, The Vevo™ Series, provides scientific
professionals with a simple method for efficiently viewing
extremely small physiological structures and for imaging living
tissue and blood flow with near-microscopic resolution.
VisualSonics was founded by Stuart Foster with financial backing of
Hargan Ventures, a Toronto based VC. The VenGrowth Advanced life
Science fund, also of Toronto, is the largest shareholder and
investor in the company.
About SonoSite, Inc.
SonoSite, Inc. (www.sonosite.com) is the innovator and world
leader in hand-carried ultrasound and industry leader in impedance
cardiography equipment. Headquartered near Seattle, the company is
represented by ten subsidiaries and a global distribution network
in over 100 countries. SonoSite’s small, lightweight ultrasound
systems are expanding the use of ultrasound across the clinical
spectrum by cost-effectively bringing high performance ultrasound
to the point of patient care.
Forward-looking Information
and the Private Litigation Reform Act of 1995
Certain statements in this press release relating to the
expected closing of the acquisition of Visualsonics, the expected
benefits of the acquisition of Visualsonics, including market
acceptance of products incorporating Visualsonics technology and
new market opportunities for Sonosite, the potential financial
effects of the transaction and other statements regarding future
results are “forward-looking statements” for the purposes of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are based on the
opinions and estimates of our management at the time the statements
are made and are subject to risks and uncertainties that could
cause actual results to differ materially from those expected or
implied by the forward-looking statements. These statements are not
guaranties of future performance and are subject to known and
unknown risks and uncertainties and are based on potentially
inaccurate assumptions. Factors that could cause actual results to
differ from the forward-looking statements include: the possibility
that the acquisition of Visualsonics is not successfully
consummated in a timely fashion or at all, the risk that we are
unsuccessful in incorporating Visualsonics technology into Sonosite
ultrasound products or in achieving market acceptance of those
products, the risk that the financial effects of the pending
acquisition are different than anticipated as well as other factors
contained in the Item 1A. “Risk Factors” section of our most recent
Annual Report on Form 10-K filed with the Securities and Exchange
Commission. We caution readers not to place undue reliance upon
these forward-looking statements that speak only as to the date of
this release. We undertake no obligation to publicly revise any
forward-looking statements to reflect new information, events or
circumstances after the date of this release or to reflect the
occurrence of unanticipated even.
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