PDI said today that it acquired molecular diagnostics group RedPath in a complex stock-and-cash deal that includes an upfront payment of $12 million; a 4-year, $11 million subordinated note to RedPath shareholders; and a $20 million, 6-year term-loan from SWK Holdings.
News of the RedPath acquisition came just a few days after PDI received, and then quickly rejected, a tentative buyout bid from Digirad.
Digirad sent PDI a letter Oct. 29 stating that it was interested in acquiring the healthcare-commercialization company in a stock-and-cash transaction at a price to be determined after Digirad had completed its due diligence. Digirad’s offer was summarily rejected by PDI’s board the following day.
"PDI’s board of directors does not consider PDI for sale and does not view your letter to be a meaningful offer to acquire PDI," wrote PDI Chairman Gerard Belle in a letter released Oct. 30.
Digirad upped the ante Oct. 31, calling upon PDI "to immediately engage in meaningful discussions regarding a transaction and to operate in the ordinary course of business and to not spend its cash, or take on additional debt, on acquisitions or other extraordinary transactions."
PDI, meanwhile, said today that the RedPath acquisition immediately expands its cancer diagnostics offerings, noting that RedPath’s test for pancreatic cancer risks generates approximately $10 million a year. RedPath also has a test in late-stage development for assessing cancer risks for Barrett’s esophagus.
PDI also released its 3rd-quarter earnings report today, reporting a net loss of -$4.3 million, or -29¢ a share, on sales of $29.3 million. That works out to a 104.8% increase in losses on a 14.6% sales decline, compared with Q3 2013.