C.R. Bard Acquires Manufacturer of Breast Cancer Devices

C.R. Bard is joining the fight against breast cancer. The Murray Hill, N.J.-based company has agreed to buy SenoRx Inc. for about $213 million in cash to gain access to its breast cancer treatment devices.

SenoRx’s board of directors unanimously approved the agreement and is recommending that the company’s shareholders approve the transaction. The merger is expected to be completed in the third quarter; once it is final, SenoRx will become part of Bard’s Peripheral Vascular division.

Bard executives predict the transaction will dilute fiscal 2010 GAAP earnings by eight cents to 11 cents per share, and non-GAAP 2010 earnings by three cents to six cents per share.

Headquartered in Irvine, Calif., SenoRx markets the EnCor stereotactic-guided and MRI-guided breast biopsy systems, the Gel Mark line of breast tissue markers and the Contura balloon catheter for the treatment of breast cancer. The company reported revenues of $55.6 million last year.

Bard officials said the merger will expand the company’s product portfolio to include breast biopsy devices designed to work with ultrasound and MRI (magnetic resonance imaging) equipment.

“The SenoRx acquisition represents a very compelling strategic opportunity for Bard, enabling us to provide customers leadership products across all breast biopsy and marker segments in addition to providing Bard its first therapeutic device for site-specific partial breast irradiation after lumpectomy procedures,” said Timothy M. Ring, Bard chairman and CEO. “SenoRx brings significant product innovation in breast care and we are confident that the combination will result in positive benefits for hospitals, doctors and patients.”

SenoRx President and CEO John Buhler called the deal a “great opportunity…to create product leadership.”

“We believe the merger represents a great opportunity for the combined companies to create product leadership by offering a broader range of high-quality breast care products to our customers,” Buhler noted. “Our agreement with Bard represents an attractive valuation for SenoRx shareholders, and as an all cash offer, provides liquidity for shareholders.”

Precisely how much liquidity is up for debate. Within hours of the merger’s announcement (and Buhler’s confident expression of financial security for shareholders), two law firms launched investigations into the deal. The law firms—one in California and one in New York City—accused SenoRx board members with a breach of fiduciary duty, claiming they failed to “adequately shop the company” before agreeing to the merger. Attorneys at both firms also questioned whether board members went through a fair process to “obtain fair consideration for all shareholders.” In addition, attorneys at the New York City law firm—Levi & Korsinsky LLP—contend that C.R. Bard underpaid SenoRx for its shares.

“The offer price is only a small premium over the $10.17 price the company’s shares traded at as recently as April 27, and the SenoRx Board of Directors agreed to a strict ‘no solicitation’ provision and agreed to pay a $9 million termination fee under certain conditions,” according to a news release.