German pharmaceutical giant Bayer AG is buying permanent contraception device maker Conceptus Inc for about $1.1 billion in cash, in order to broaden its portfolio in contraceptives.
Under the deal agreed today, Bayer, which makes Yaz and Yasmin oral birth-control pills, will pay $31 a share in cash, a 20-per cent premium to Conceptus' closing price of $25.90 on 26 April.
Founded in 1992 by Target Therapeutics and venture capital funds, California-based Conceptus is an innovative developer of permanent birth control devices.
The company's flagship product, the Essure procedure, was the first-ever successful, non-surgical permanent birth control procedure approved for use in the US and Europe, and is the most effective method of permanent birth control available.
The Essure procedure is performed using a hysteroscope in less than 10 minutes, typically in a physician's chamber, and is less invasive and less expensive than tubal ligation surgery.
Essure has been on the market in the US since 2002 and more than 550,000 Essure procedures have been performed worldwide and approximately 70 per cent of them have been performed in physician's office.
Conceptus generated net sales of $141 million in 2012 and employs around 300 people.
"Bayer is committed to augmenting its organic growth with strategic bolt-on acquisitions. The acquisition of Conceptus represents an excellent fit for our HealthCare business – specifically in the US, the world's most important health care market," said Dr Marijn Dekkers, CEO of Bayer AG.
"Essure completes Bayer's portfolio of long-acting intra-uterine systems and short-acting oral contraceptives. Our experience in the field of gynecology combined with our sales and distribution expertise will help to further develop Conceptus' business," said Andreas Fibig, member of the Bayer HealthCare Executive Committee and president of Bayer HealthCare Pharmaceuticals.
"Essure has been well accepted in the market for more than ten years and demonstrated robust growth over this time. We believe that under Bayer's ownership, the Essure product will more rapidly become the standard of care in our established markets, and will benefit in new markets from Bayer's global presence,'' said, Keith Grossman, president and CEO of Conceptus.