Covington Associates Completes Sale of Inverness Medical to Johnson & Johnson
Combined technologies poised for self-care and -diagnostic diabetes advances
November 21, 2001 – Boston, MA — Covington Associates, seasoned M & A advisors to technology and healthcare, today announced the $1.3 billion sale (excluding certain businesses) of its client, Inverness Medical Technology, Inc. (“IMT”), to Johnson & Johnson (“J&J”), the world’s most comprehensive and broadly-based manufacturer of health care products. The acquisition extends J&J’s array of self-care and -diagnostic products related to diabetes management. The portion of IMT which develops, manufactures, and markets innovative products focused on diabetes self-management, will become part of J&J’s LifeScan franchise; LifeScan provides blood glucose monitoring systems for home and hospital use. IMT’s businesses in women’s health, nutritional supplements, and clinical diagnostics will form a new, publicly-traded company owned by Inverness shareholders and named Inverness Medical Innovations, Inc., to be traded under the American Stock Exchange symbol IMA.
In a stock-for-stock exchange, IMT shareholders will receive J&J common stock valued at $35.00, plus a common stock interest in the new company, for each IMT share. With 38 million fully-diluted IMT shares outstanding, net equity of the deal has been valued at approximately $1.3 billion. Included within the transaction are IMT’s electrochemical blood glucose meters and self-diagnosis strips, intellectual property rights to the Debiotech S.A. technology for developing an external insulin pump, and the technologies from two recent IMT acquisitions: LXN Corporation’s dual glucose and fructosamine monitors and Integ Incorporated’s advanced interstitial fluid sampling.
“Having worked closely with Inverness for over eight years, we have established a long-standing relationship resulting in several acquisitions and financings,” said Chris Covington of Covington Associates, who advised Inverness on the J&J transaction. “We have also come to know the quality of the Inverness vision; this acquisition underscores Johnson & Johnson’s and Inverness’ unwavering commitment to continually improving care and management techniques for a condition affecting millions.”
An estimated 6 percent of the U.S. population are living with diabetes, according to the National Institutes of Health; the World Health Organization sets worldwide incidence of people with the condition at 300 million by 2025. The combination of J&J and IMT technologies shows clear promise for improving the quality and range of self-care products related to diabetes, improving quality of life and level of independence for the diabetes population worldwide.
“Covington Associates has been a close advisor to IMT for several years and has played a critical role in assisting in the execution of our strategies,” said Ron Zwanziger, Chairman of IMT. “This transaction, in particular, required a level of understanding both of the industry and our business goals, that made our enduring relationship with the firm especially beneficial – it was a complex deal with a significant amount of variables.”
About Inverness Medical Technology, Inc.
IMT develops, manufactures, and markets innovative products focused primarily on diabetes self-management. The company’s proprietary glucose monitoring systems are marketed worldwide by LifeScan, a Johnson & Johnson company. Inverness also markets other diabetes and women’s health products to consumers through its own established retail distribution networks, which include Wal-Mart, CVS, and Walgreens. IMT’s manufacturing facilities are located in Inverness, Scotland; Galway, Ireland; and Yavne, Israel; a European sales office is located in Munich, Germany. Corporate headquarters are located in Waltham, Massachusetts. For more information, visit www.invernessmedical.com.
About Covington AssociatesCovington Associates are seasoned M & A advisors to technology and healthcare. Focused exclusively on mergers and acquisitions, Covington Associates has established a track record of success based on deep domain experience and an unrivaled level of service from a team of senior advisors. Since 1991, the firm has successfully completed over 50 transactions ranging in size from $10 million to over $1 billion in e-services, software, IT services, and healthcare technologies. To learn more about Covington Associates, visit www.covingtonassociates.com.