Opto Circuits buys US firm for $68 mn

Bangalore-based Opto Circuits India, a Rs 600-crore manufacturer of healthcare equipments, has signed a definitive agreement to acquire Wisconsin-based Criticare Systems Inc, a maker of medical equipments, for $68 million (a little over Rs 260 crore). Opto will rely majorly on debt to fund this deal in addition to internal accruals.

The $31.4-million Criticare Systems Inc, together with its subsidiaries, is engaged in the design, manufacture and marketing of vital signs and gas monitoring instruments, and related non-invasive sensors used to monitor patients in various healthcare environment.

Under the agreement, a group of institutional investors holding around 25 per cent of the target company has committed to this deal and the rest 40 per cent is expected to be mopped up through an open offer.

Vinod Ramnani, chairman and managing director, Opto Circuits, said institutional investor Blue Line Partners holds a significant chunk of the 25 per cent and have recommended this offer to other shareholders.

The closing of the offer is subject to Opto Circuits acquiring 65 per cent of the outstanding shares of Criticare's common stock on a fully diluted basis.

Under the agreement, Opto Circuits will have to make an open offer to acquire Criticare for $5.50 per share for an aggregate price of approximately $68 million (including debt and cash).

In addition, another $2 million will be spent on associate cost.

The offer price of $5.50 per share represents a premium of 65 per cent to the average price of Criticare common stock over the preceding three months and a premium of 19 per cent to the closing price of Criticare common stock on February 22 of $4.62.