Nordion To Be Acquired By Sterigenics For $727 Mln - Update

(RTTNews) - Canadian health science company Nordion Inc (NDN.TO) (NDZ) Friday agreed to be acquired by U.S.-based Sterigenics, a sterilization services provider and a portfolio company of private equity firm GTCR LLC, in a deal valued at $727 million.

Nordion CEO Steve West said the deal delivers value to its shareholders and is a good strategic fit.

Sterigenics, based in Deerfield, Illinois, offers technology in all major sterilization modalities, while Nordion is the world's leading supplier of C-188 cobalt-60 (Co-60) double-encapsulated sources for gamma sterilization.

By wrapping up Nordion, Sterigenics hopes to ensure a stable long-term source of Cobalt-60 that will maintain customer confidence in the future availability and growth of gamma sterilization.

Nordion has a niche in the medical isotopes and sterilization sectors and the deal fits with our business plans, said Sterigenics in a statement.

As per the terms, Nordion shareholders will receive an aggregate cash consideration of $11.75 per share, representing a premium of about 13 percent to the company's closing stock price of $10.41 per share on the NYSE on Friday, March 28.

Ottawa, Ontario-based Nordion will operate as a standalone company within Sterigenics and will continue to operate under the Nordion name.

The deal is expected to close in the second half of calendar 2014 and is subject to a host of approvals, including from Canadian court, shareholders and regulators.

The deal is also conditional upon Sterigenics having at closing $300 million of cash on hand to complete the steps of the merger - a sum which it currently has in excess.

The board of Nordion has approved the deal and recommends its shareholders to support it.

A termination fee of $12 million will be payable to Sterigenics in certain cases, including if Nordion fails to come up with a superior proposal, and a reverse break fee of $24 million would be payable by Sterigenics if it does not consummate the deal completed in certain cases.

Earlier this month, Nordion reported a swing to first-quarter profit, mainly on a 32 percent jump in revenue.

Nordion stock closed Friday at $10.41, down $0.07 or 0.67%, on a volume of 329k shares on the NYSE.