Bayer HealthCare LLC, a unit of German conglomerate Bayer AG (BYR.L,BAYRY.PK,BAYZF.PK), Monday said it has agreed to buy Conceptus, Inc. (CPTS), the developer of the only non-surgical permanent birth control method, Essure procedure, for about approximately $1.1 billion or about 852 million euros.
In a separate statement, Conceptus also reported a profit in its first quarter, compared with last year's loss, benefited by strong U.S. sales of Essure. Both earnings and sales topped the Street estimates.
For the acquisition of Conceptus, Bayer will launch a public tender offer for $31 per share in cash within the next ten business days. The company expects to close the deal by mid-year 2013, subject to customary conditions, in particular anti-trust approval in the U.S.
With the acquisition, Bayer intends to broaden its contraception portfolio, and will be able to offer a complete range of short-term, long-term and permanent contraceptive choices for women. Bayer noted that Essure completes its portfolio of long-acting intrauterine systems and short-acting oral contraceptives.
Bayer CEO Marijn Dekkers added, "Bayer is committed to augmenting its organic growth with strategic bolt-on acquisitions. The acquisition of Conceptus represents an excellent fit for our HealthCare business - specifically in the United States, the world's most important health care market."
The Mountain View, California-based Conceptus employs approximately 300 people. Conceptus' flagship product is the Essure procedure, which was approved by the U.S. Food and Drug Administration or FDA in 2002. According to the company, the procedure is 99.8 percent effective based on five years of follow up with zero pregnancies reported in clinical trials.
Conceptus, in its first quarter, had generated net income of $1.86 million or $0.05 per share, compared with a net loss of $2.84 million or $0.09 per share a year ago. On average, 12 analysts polled by Thomson Reuters expected the company to report a loss of $0.01 per share for the quarter. Analysts' estimates typically exclude special items.
Total net sales climbed 17.5 percent to $34.11 million from last year's $29.03 million, while analysts were looking for $32.04 million.
U.S. sales were $26.5 million, 21.7 percent higher than last year, benefited by a 22.2 percent increase in sales of Essure in the region. International sales grew 5 percent.
Owing to the merger agreement with Bayer, Conceptus will not provide 2013 financial guidance, and has canceled the previously-announced earnings call originally scheduled on Tuesday, April 30, it said in the statement.
On Frankfurt's Xetra, Bayer shares are currently trading at 79.08 euros, down 2.08 euros or 2.56 percent.
On Nasdaq, Conceptus shares closed Friday's trading at $25.90, down $0.83 or 3.11 percent.
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