NEW YORK (GenomeWeb News) – Beckman Coulter yesterday disclosed further terms of its acquisition of Olympus' diagnostics business and fixed the closing cost of the deal at $780 million.
Last week, Beckman said that it would pay for the $800 million acquisition of Olympus' diagnostics business through a combination of around $300 million in Beckman Coulter stock and $500 million in newly issued debt.
In a filing with the US Securities and Exchange Commission, Beckman said that it has entered into forward contracts with several financial institutions including Bank of America, JP Morgan Chase, Wells Fargo Bank, Morgan Stanley Capital Services, The Royal Bank of Scotland, and Scotia Capital to cover the full amount of the closing payment in order to hedge against the risk of changes in the exchange rate of the Japanese Yen versus the US dollar. The result of these contracts sets the purchase price at $780 million.
In addition, Beckman said that it would be required to pay a termination fee of around $26 million to Olympus should it decide not to complete the acquisition even though all closing conditions are met.
As part of the deal, Olympus will spin off the diagnostics systems business assets in Germany, France, and Japan, and Beckman will acquire the capital stock of each of these newly formed entities.
Beckman said that it expects to reduce operating expenses of $50 million to $60 million out of the more than $1.2 billion of combined operating expenses. It said that savings will be realized from "leveraging existing global infrastructure and integrating sales, service, administrative, and R&D activities."
Beckman also intends to eliminate Olympus' immunoassay product line following closure of the deal. Those products will reduce 2010 revenues by around $5 million, said Beckman. However, the firm also noted that it will save around $20 million of R&D expense in 2010 by eliminating Olympus' immunoassay R&D program.