Even as access to cheap debt has dried up and the rate of deals flow has dwindled, Warburg Pincus seems to show no sign of slowing down. Since 1989, Warburg has invested more than $1 billion in the medical device space, with equity spread across 20 companies and a focus on diabetes, interventional cardiology, neurology, orthopedics and urology.
In 2000, Warburg founded ev3 (EVVV), a specialty device company focused on the cardiovascular, neurovascular, and peripheral vascular disease markets. ev3 completed its initial public offering in June 2005, raising $120 million in net proceeds. ev3 subsequently acquired Micro Therapeutics in January 2006 and bought a 59 percent stake in FoxHollow Technologies (FOXH) this July.
Warburg also owns a sizeable share of DexCom (DXCM), a developer of continuous glucose monitors, having invested $14.5 million in a Series D financing back in 2004.
Lifecore Biomedical (LCBM), based in Chaska, MN, is Warburg’s most recent acquisition.
Lifecore develops dental implant systems, tissue regeneration products, and medical grade hyaluronan, a naturally occurring polysaccharide that is widely distributed in the extracellar matrix of connective issues in animals and humans. Lifecore’s oral restorative products are surgically placed into the jawbone, which maintains underlying bone structure and provides fixation of restorations.
Sales for the first six months of fiscal year 2008 were $33.0 million, an increase of 4% over the $31.6 million reported for the first six months of fiscal year 2007.
The company will be acquired through a tender offer, followed by a merger, for a price of $17 per share in cash representing a premium of approximately 30% over the average price of Lifecore’s shares over the last 30 trading days.
The transaction, valued at approximately $239 million, is subject to the valid tender of a majority of Lifecore’s fully diluted common shares, regulatory approvals and other customary conditions, but is not subject to any financing condition. Lifecore expects the transaction to close by the end of the first quarter of 2008.
Dennis J. Allingham, President and CEO of Lifecore commented, “As a private company, Lifecore will have greater flexibility to focus on its long-term strategic direction. Warburg Pincus and its affiliates have confidence in Lifecore’s future and will support achieving our long-term goals.”