Medical technology company Hologic Inc. said yesterday that it would acquire molecular diagnostics company Third Wave Technologies Inc. in a cash deal worth $580 million.

Under the deal, Hologic will acquire all outstanding shares of Third Wave at $11.25 per share, a premium of 24 per cent over Third Wave's three-month average trading price.

The boards of directors of both companies unanimously approved the transaction in which Hologic is to acquire 100 per cent of Third Wave's stock in a cash tender offer to be followed by a merger to acquire any untendered shares. The deal is expected to close in the third quarter.

Hologic intends to borrow $600 million to finance this transaction in the form of a senior secured credit facility on terms substantially consistent with the company's existing credit facility. Hologic has secured fully committed debt financing for the full consideration from Goldman, Sachs & Co.

Jack Cumming, chairman and CEO of Hologic, said, "The combination of Hologic and Third Wave brings together two great companies that employ complementary technologies but share a common mission: to help save the lives of women. Hologic is an established, diversified provider of diagnostic products and therapeutic devices. Third Wave's products in development, including its HPV tests, employ a patented molecular diagnostic platform designed to help identify cervical cancer and other diseases at an early stage. This important transaction will broaden Hologic's range of diagnostic product offerings, enhance our revenue and earnings growth potential and, we believe, create long-term value for our shareholders.''

"Specifically, we expect our acquisition of Third Wave to help accelerate the growth of our diagnostics division," Cumming continued. "Once FDA approval is obtained, these products, will be a complementary fit with our current suite of products, and broaden our product offerings into high-growth diagnostic markets for women.''

"We welcome this opportunity to deliver outstanding value to our stakeholders," said Kevin Conroy, CEO of Third Wave. We look forward to working with Hologic to complete the transaction efficiently and to delivering its benefits to our respective shareholders, customers, employees and to women worldwide."

In connection with the transaction, Goldman, Sachs & Co. acted as exclusive financial advisor to Hologic, and Brown Rudnick LLP provided legal counsel. XMS Capital Partners and Merrill Lynch & Co. acted as financial advisors to Third Wave. Kirkland & Ellis LLP and Kennedy, Covington Lobdell & Hickman LLP provided legal counsel to Third Wave.

Hologic, Inc. is a leading developer, manufacturer and supplier of premium diagnostics, medical imaging systems and surgical products dedicated to serving the healthcare needs of women.

Hologic's core business units are focused on breast health, diagnostics, GYN surgical, and skeletal health. Hologic provides a comprehensive suite of technologies with products for mammography and breast biopsy, radiation treatment for early-stage breast cancer, cervical cancer screening, and treatment for menorrhagia, osteoporosis assessment, preterm birth risk assessment, and mini C-arm for extremity imaging.

Third Wave Technologies, Inc. is a growing leader in molecular diagnostics, providing DNA and RNA analysis products to clinical, research, and agricultural customers. Third Wave has over 210 clinical testing customers and the list continues to grow. In the United States, they serve most major clinical laboratories that perform molecular diagnostic testing.

Third Wave has also established a strong presence in Japan and more recently, began to establish distribution in Europe. Their clinical diagnostic products are used by clinical laboratories to create tests for screening, prognosis, diagnosis, and monitoring by physicians of individual patients.