Theragenics (NYSE:TGX) said a private equity firm, Juniper Investment Co., offered to pay up to roughly $71 million for the medical device company, sending its shares to a 52-week high today on Wall Street.
Buford, Ga.-based Theragenics said it’s agreed to exclusive negotiations over Juniper’s initial $2.25- to $2.30-per-share bid until June 11. Juniper’s initial May 10 acquisition proposal was for $2.05 to $2.10 per share, according to a press release.
The agreement also includes a provision for a 30-day "go shop" period during which Theragenics can seek other buyout proposals, according to the release.
"No final decision has been made to engage in a merger transaction or similar business combination with Juniper or any other party," Theragenics said. "The board continues to evaluate strategic alternatives, including Juniper’s proposal, consistent with its fiduciary duties to act in the best interest of the company’s stockholders," Theragenics said.
At $2.30 per share, which works out to a deal worth about $71.4 million, the buyout would represent a 54.4% premium over TGX’s $1.49 closing price May 10. Shares were trading at $1.95 apiece as of about 10:50 a.m. today, up 30.9%.
Last week the company, which makes surgical products and brachytherapy devices for treating prostate cancer, reported a swing to 1st-quarter losses of $34,000, or 0¢ per share, on sales of $19.2 million, for a 7.9% top-line slide.
"Brachytherapy continues to be affected by an overall decline in the number of procedures for the treatment of prostate cancer. Yet the brachytherapy business did improve slightly from 4th-quarter 2012 results. Our surgical products business experienced softened demand. This trend mirrored public statements made by our larger customers regarding an overall decline in medical procedures and a reduction in visits to physicians by patients in the first quarter. Both businesses were also impacted by the new medical device tax implemented on January 1, 2013," chairwoman & CEO Christine Jacobs said in prepared remarks.
The results pushed Theragenics to restructure its vascular access operations, with a plan to shutter its plant in Garland, Texas, by the end of 2014
"We will outsource most of this manufacturing to independent suppliers in Latin America. Some of the more complex manufacturing in this operation will be transferred to our specialty needle plant in North Attleboro, Mass.," Jacobs said. "Once complete, we expect this restructuring to significantly reduce our costs and allow us to remain competitive in a highly competitive marketplace. We deeply regret the loss of jobs and having to take these steps. However, we continue to be responsive to our customers’ needs and to address and anticipate macroeconomic conditions. Regulatory issues, taxes and decreased demand across the sector dictate that we change with the environment."