HDI Acquired by Nipro

HDI Acquired by Nipro

Going into the day Diabetic Investor anticipated the biggest piece of news coming out of the Roche earnings call. But the Roche results were trumped by a stunner of a deal when Home Diagnostics (NASDAQ:HDIX) announced they agreed to be acquired by Nipro Corporation. For those who may be unfamiliar with Nipro, this Tokyo based company already has a presence in the diabetes device area with their line of insulin pumps.

Although Diabetic Investor can’t say we’re surprised that someone acquired HDI, we’re a little stunned by the premium Nipro is paying. According to an HDI press release; “Home Diagnostics, Inc. (NASDAQ: HDIXNews), a leading manufacturer and marketer of diabetes testing supplies, announced today that it signed a definitive merger agreement with Nipro Corporation (Tokyo Stock Exchange and Osaka Stock Exchange Ticker Code 8086), a global manufacturer and distributor of medical devices, pharmaceutical products and medical and glass products headquartered in Osaka, Japan, under which Nipro will acquire all outstanding shares of Home Diagnostics’ common stock, $.01 par value, for a cash purchase price of $11.50 per share (or aggregate consideration of approximately $215 million). The offer price represents an approximately 90% premium to the closing price of Home Diagnostics’ common stock on February 2, 2010, and an approximately 83% premium to Home Diagnostics’ average closing price for the preceding 90 days.” Highlighting added by Diabetic Investor.

Diabetic Investor suspects this move by Nipro signals a shift in the company’s strategy to become a serious player in the US insulin pump market. Currently a minor player here Nipro could sense an opportunity to combine their new Amigo® insulin pump with the HDI line of glucose monitors making the product more competitive with systems offered by Medtronic (NYSE:MDT) and Animas. Given HDI’s vast experience with major pharmacy retailers and distributors the combined company could offer a co-branded value priced insulin pump system.

The move also allows Nipro to use the HDI line of glucose monitors to move into the BGM arena overseas.

From our perspective this deal is the classic win-win situation as it provides HDI with additional resources to expand their BGM line here in the US while at the same time providing Nipro with the ability to become a player in the US insulin pump market and a player in the overseas BGM market.