News | May 20, 2007

Hologic to Buy Cytyc for $6.2 Billion

By CHARLES FORELLE
May 21, 2007 - Hologic Inc. has agreed to buy Cytyc Corp. for $6.2 billion in cash and stock, in a deal that combines two major players in women's health care.

Executives of both companies say the tie-up will increase the opportunity for sales representatives to win over obstetricians and gynecologists, who are critical to recommending that patients use the companies' products.

"The OB/GYN is the one person a woman listens to and takes advice from," says Jack Cumming, Hologic's chief executive. Mr. Cumming says the combined company will have 425 sales representatives in the U.S. dedicated to calling on OB/GYNs.

Cytyc, which is the leader in the market for Pap smears, also makes devices to treat uterine bleeding and to deliver radiation therapy in breast-cancer patients. Hologic's major product is a digital mammography tool.

Hologic is based in Bedford, MA, about 15 miles from Cytyc in Marlborough, Mass. Mr. Cumming and Patrick Sullivan, the Cytyc CEO, live in the same town.

Mr. Cumming says the two companies have long crossed paths, given their similar markets and physical proximity. "In many regards, this combination has been a long time coming," said Mr. Sullivan, who will become Hologic's chairman. Mr. Cumming will continue as CEO.

Cytyc's traditional Pap smears makes up the bulk of its business-about 40% of the company's sales. But that segment is slower-growing than Cytyc's medical devices. Hologic, which once relied heavily on osteoporosis screening, has seen considerable success with digital mammography, which arrived by way of an acquisition about five years ago.

Hologic shares have risen some seven-fold in five years. By market-capitalization, Hologic is the smaller company, but thanks to the magic of leverage, it is the acquirer. Hologic will pay 0.52 Hologic shares, valued at about $29.96 as of Friday's closing price, plus $16.50 in cash for each share of Cytyc.

Hologic will borrow the $2.2 billion necessary to pay the cash portion of the acquisition. Overall, Hologic is paying $46.46 per share of Cytyc, a premium of 33% to Cytyc's closing price Friday.

Source: The Wall Street Journal Online, www.wsj.com

Related Content

Technology | Archive Cloud Storage | November 19, 2018
November 19, 2018 — Intelerad Medical Systems announced the launch of the nuage Disaster Recovery (DR) Platform.
News | Enterprise Imaging | November 14, 2018
Konica Minolta Healthcare Americas Inc. will showcase new features and tools for the Exa Enterprise Imaging platform at...
Deaconess Health System Chooses Sectra as Enterprise Imaging Vendor
News | Enterprise Imaging | November 02, 2018
International medical imaging information technology (IT) and cybersecurity company Sectra will install its enterprise...
Carestream Spotlights Healthcare IT and Imaging Systems at RSNA 2018
News | Information Technology | October 31, 2018
Carestream announced it will be displaying several imaging and healthcare information technology (IT) offerings at the...
Cullman Regional Medical Center

Cullman Regional Medical Center (Alabama) is a 145-bed medical center serving more than 175,000 residents in a six-county area and recognized as one of the region’s finest medical facilities.

Sponsored Content | Case Study | PACS | October 05, 2018
When Cullman Regional Medical Center in Alabama decided to switch from 2-D
Agfa Introducing New MUSICA Workstation at RSNA 2018
News | PACS Accessories | October 04, 2018
At the 2018 Radiological Society of North America (RSNA) annual meeting, Nov. 26-30 in Chicago, Agfa HealthCare will...
Intelerad Medical Systems Appoints New President and CEO
News | Enterprise Imaging | September 25, 2018
September 25, 2018 — Intelerad Medical Systems announced that following the retirement of Randall Oka, its board of d
Laurel Bridge Enables Healthcare Providers to Manage Image Archive Migrations and Consolidations
News | Enterprise Imaging | September 25, 2018
September 25, 2018 — Laurel Bridge Software announced improvements to their Exodus Migration and Consolidation Contro
Sponsored Content | Case Study | Information Technology | September 07, 2018
One of the Northeast’s major teaching hospitals is an international leader in virtually every area of medicine. It has...