Healthcare products company Johnson & Johnson has agreed to buy New York-based Omrix Biopharmaceuticas, which develops and manufactures biosurgical sealants for the prevention of homeostasis in surgery, for $465 million.
The acquisition will help Johnson & Johnson expand it's biosurgical and immunotherapy product range, the companies said in a release.
As per the terms of the deal, J&J will pay $25 per share in a cash tender offer, scheduled to close at the end of December. The offer is at an 18 per cent premium to Omrix's closing price of $21.16 on Friday. The boards of both companies have approved the deal.
Omrix will operate as a stand-alone entity reporting through J&J subsidiary-Ethicon, the companies said. Ethicon has been Ormix's partner in Israel for eight years.
Since New York-based Omrix does most of its research and manufacturing in Israel, the acquisition is conditioned on Israeli antitrust clearance and other customary closing conditions.
The rumors of an imminent sale broke at the end of last week, after a team from Ethicon arrived in Israel and began a thorough review of the company.
Robert Taub, Omrix's founder and chief executive officer, and entities controlled by Robert Taub have agreed to tender approximately 16 per cent of Omrix's outstanding shares in the tender offer.
The deal would result in a $120 million charge for J&J in 2008.
Omrix is a fully integrated biopharmaceutical company that develops, manufactures and markets protein-based biosurgery and passive immunotherapy products. Omrix's biosurgery line includes products and product candidates that are used for the control of bleeding, or hemostasis, and other surgical applications.
Ethicon, is a leading provider of suture, mesh, hemostats and other products for a wide range of surgical procedures and it already has certain distribution rights in the US and Europe for Omrix's Evithrom and Evicel, both of which are used to control bleeding during surgical procedures.
Meanwhile, Ethicon and Omrix are also jointly developing Fibrin Pad product, which is currently in Phase II clinical trials, which will be as an adjunct for controlling mild to moderate soft tissue bleeding.
The acquisition of Omrix would provide Ethicon, with an opportunity to strengthen its presence in active, biologic-based hemostats and convergent products for various surgical applications.
"Our partnership with Omrix has already expanded our capacity to provide innovative, next generation products that raise the standard of surgical care. We believe this transaction will further enhance our efforts to bring new, science-based products to patients and the healthcare professionals who treat them," said Alex Gorsky, company group chairman for Johnson & Johnson and Ethicon business head worldwide.
"We are delighted to announce this transaction, which combines Omrix's expertise in developing innovative biological products with Ethicon 's commercialisation expertise and global reach. We believe this merger is in the best interest of Omrix's shareholders, customers and employees," said Robert Taub, the CEO of Omrix.