United States-based medical device maker Cyberonics Inc (CYBX.O) has agreed to buy Sorin SpA (SORN.MI) in an all-stock deal that the Italian company said values it at about $1.4 billion.
The new group will bring together two global leaders in the growing markets of cardiac surgery and neuromodulation, with a combined equity value of $2.7 billion, the companies said in a joint statement on Thursday.
It will also be a leading player in cardiac rhythm management, especially in Europe and Japan, they added.
Cyberonics will hold a 54 percent stake in the new company and Sorin the rest. The business will be domiciled in Britain and will apply for dual-listing on Nasdaq and the London Stock Exchange.
"(The) NewCo will have several promising opportunities focused on multibillion-dollar markets, including complementary research programs addressing heart failure, with an initial commercial launch in Europe anticipated in coming weeks," the statement said.
Neuromodulation involves devices that stimulate the vagus nerve, a superhighway connecting the brain to the rest of the body.
Cyberonics shareholders will receive one share of the new company for every share held, while Sorin shareholders will receive 0.0472 of a share in the new company for each Sorin share owned.
The exchange ratio implies a premium of 14.2 percent to Sorin's closing share price on Feb. 25, the companies said. Sorin had a market capitalization of 1.05 billion euros on Wednesday.
Shares in Sorin were suspended from trading for excessive gains on Thursday and were indicated 19.5 percent higher at 2.62 euros by 0842 GMT (3.42 a.m. ET).
The chief executive of Sorin, Andre-Michel Ballester, will become CEO of the new company. Sorin was advised by Rothschild.
Cyberonics shares will cease trading on the Nasdaq and Sorin shares will stop trading on the Milan exchange.
Source : http://www.reuters.com/