Opto Circuits to acquire Cardiac Science, law firm investigates
October 26, 2010
by Heather Mayer
, DOTmed News Reporter
Cardiology device manufacturer Cardiac Science Corporation was bought by India-based Opto Circuits, the companies announced last week. Opto Circuits, a health care equipment and interventional products manufacturer, acquired all of Cardiac Science's outstanding common stock shares for $2.30 per share.
"We believe this transaction provides excellent value to our shareholders and expanded opportunity for our customers, employees and partners," Dave Marver, Cardiac Science president and chief executive officer, said in prepared remarks.
The $2.30 price tag represents a 10 percent premium to the closing price of Cardiac Science common stock of $2.10 on Oct. 18, a 28 percent premium to the average closing price for the 30-day period ending Oct. 18 and a 30 percent premium to the average closing price for the 100-day period ending Oct. 18.
Both companies' boards of directors unanimously approved the transaction, which will be an all-cash tender offer by a wholly owned subsidiary of Opto Circuits, followed by a second-step merger, according to Cardiac Science. The closing of the deal is expected to begin this week. The companies are aiming for a late fourth quarter 2010 closing.
Once the deal is closed, Cardiac Science will become a wholly owned subsidiary of Opto Circuits.
"We are delighted to expand our presence in noninvasive diagnostic monitoring through this acquisition and are excited to enter the high-growth automated external defibrillation market," said Vinod Ramnani, Opto Circuits chairman and managing director, in prepared remarks. "This transaction is expected to open many new global markets for Cardiac Science's products and will greatly enhance Opto Circuits' product offering and presence in the United States."
Cardiac Science's acquisition is being called into question by the law office of Brodsky & Smith LLC, which announced Oct. 20 it is investigating potential claims against the company's board of directors relating to the acquisition.
The investigation concerns possible breaches of fiduciary duty and other state law violations, according to the firm. The transaction, argues the firm, appears to be "unfair" because the offer represents no premium over the $2.47 per share Cardiac Science stock traded at as recently as Aug. 4. An analyst, according to the firm, set a price target for the company's stock at $6 per share. It's suggested that Opto Circuits underpaid for the company.
Cardiac Science closed at $2.29 per share Monday.