Insulet Corp. (NSDQ:PODD) announced today that it acquired Neighborhood Diabetes Inc. for $63 million in cash and stock, a move that more than triples Insulet’s customer base.
With the acquisition of its fellow Bay State firm, Bedford, Mass.-based Insulet offers its customers a suite of diabetes management products including glucose testing supplies, continuous glucose monitoring sensors and insulin to go with its flagship Omnipod insulin management system.
The deal gives Insulet 60,000 new customers, half of which are insulin-dependent and more than 13,000 of which require multiple daily injections, CFO Brian Roberts told MassDevice. The addition amounts to a 340 percent increase to Insulet’s existing base of about 25,000 customers, Roberts told us.
The merger is a natural fit for the companies, he noted. Neighborhood and Insulet were close friends through previous distribution deals and Omnipod customers were eager to buy additional diabetes management supplies through Insulet.
The merger "allows us to bring to our customers additional products and services that, frankly, they ask for today" without adding to the company’s operating costs, Roberts said. "We’re doing most of the work you would need to do anyway, by shipping them pods, so for us to be able to ship them additional products…all of that gross profit ultimately flows into becoming operating profit."
Neighborhood specializes in direct-to-consumer diabetes management products, including supplies, pharmaceuticals, and support services. Neighborhood’s experience with providing insulin was particularly valuable to Insulet.
"That pharmacy piece is something that has a level of expertise and regulation with it that, frankly, we weren’t capable of doing on our own," he said.
Insulet also expects to benefit from Neighborhood’s experienced Medicare and Medicaid reimbursement infrastructure, especially with children’s Medicaid.
The deal will likely be Insulet’s last as far as diabetes management supplies are concerned, Roberts said.
Here’s a roundup of companies announcing mergers, acquisitions and divestitures.
Hologic buys Chinese device distributor
Hologic Inc. (NSDQ:HOLX) acquired Chinese medical device and diagnostics distributor TCT International Co. Ltd. for $100 million in cash, a $35 million deferred payment and an earn-out.
The Bedford, Mass.-based women’s health firm said Beijing-based TCT, which alrady distributes Hologic’s ThinPrep human papilloma virus test, employs more than 500 workers. The company plans to roll its new acquisition into its international business.
The deal calls for the $35 million deferred payment to land after a year and for a two-year cash earn-out, based on a multiple of TCT’s revenue growth. Hologic said it expects the deal to put $10 million toward its top line in fiscal 2011.
London-based ConvaTec Holdings UK Ltd.’s Amcare subsidiary bought Arthur Wood Ltd.’s Trent Direct business for an undisclosed amount. Trent Direct sells prescribable stoma and continence care products into the home healthcare market.
Healthpoint Biotherapeutics acquired Regranex gel and the corresponding patent portfolio from Quincy, Mass.-based Systagenix for an undisclosed amount. The gel is a recombinant human platelet-derived growth factor for treating lower extremity diabetic neuropathic ulcers.
Legs 4 Life buys Swiss compression stocking maker’s North American ops
Asheboro, N.C.-based Legs 4 Life LLC, which owns Ames Walker International, acquired the North American business of Swiss compression stocking maker Venosan for an undisclosed amount.