Aspect Medical Systems (NSDQ:ASPM) accepted Covidien’s (NYSE:COV) $58 million tender offer on a portion of Aspect’s debt as part of a $210 million acquisition.
The offer for the 2.5 percent convertible senior notes, which come due in 2014, expired Dec. 11, 2009. Holders of the $57.95 million worth of notes will get $1,012.43 per $1,000 invested, making the aggregate cost of the buy about $58.7 million. Covidien said the payout includes accrued interest on the notes up to but not including the date of payment.
Covidien completed the $210 million acquisition of Aspect in November, paying $12 per share for the Norwood, Mass.-based firm. Aspect makes brain monitoring equipment that measures the effects of anesthesia and sedation. The price amounted to a 57 percent premium over Aspect’s $7.67 share price as of market close Sept. 25, when the deal was announced. Covidien said it will fold Aspect into its oximetry and monitoring product line under the umbrella of its medical devices segment.
Aspect posted second-quarter sales of $24.9 million, down slightly from $25.2 million during the same period last year.
And although net income plummeted from $119 million during the 2008 second quarter to $307,000 during the three months ended July 4, operating margins improved to 2.5 percent, compared with -3.8 percent on a nearly million-dollar loss during Q2 2008.
In an email to investors Rick Wise, an analyst at the investment bank Leerink Swann called the acquisition a “tuck in” transaction for Covidien. Wise said the deal was similar in nature to the recent “small technology purchase deals,” of companies like VNUS, Bacchus Medical and Power Medical. These deals, he said, both bolstered Covidien’s product lines and would assist in fattening the company’s bottom line in the near future. In particular, Wise said that Aspect would help shore up the company’s respiratory business, which is off some 14 percent from 2008, according to the analyst.