December 23, 2008: Volcano Corp., a manufacturer of products for the diagnosis and treatment of coronary and peripheral artery disease, has entered into a definitive agreement to acquire Axsun Technologies Inc., a privately-held developer and manufacturer of lasers and optical engines based on its MEMS technology platform. Axsun's technology is used in medicalOptical Coherence Tomography (OCT) imaging systems and advanced photonic components and subsystems used in other industrial applications.
Volcano plans to utilize new integrated versions of Axsun's advanced tunable laser and optical engine technology in the development of new OCT imaging systems. Axsun's technology and laser components allow for dramatic imaging performance improvements in equipment form factors as small as 1/1000th the size of current laser components at very low manufacturing costs.
Under terms of the acquisition agreement, Volcano will pay approximately $21.5 million in cash at closing. Axsun will operate as a wholly-owned subsidiary of Volcano.
"Axsun is another complementary and important transaction for Volcano as it provides us proprietary OCT technology that we believe will both accelerate our OCT product development efforts and provide us significant and sustainable competitive advantages in the invasive imaging arena. We believe OCT technology will extend Volcano's reach to clinical indications and research opportunities that represent sizeable market opportunities that are beyond those served by our current offerings," said Scott Huennekens, president and chief executive officer of Volcano.
The company said that it expects this transaction to be neutral to consolidated earnings per share in fiscal 2009 and that following completion of the transaction it will have more than $145 million in cash, with no debt. The company said it will provide additional details on the financial impact of the transaction when it provides 2009 guidance during its fourth quarter earnings conference call in mid-February.
"The Axsun laser and optical engine technology is a key building block in our strategy to cement our already strong position in invasive imaging," Huennekens continued. "The company's core technologies are truly leading-edge and will advance our programs to both enhance system performance and achieve lower manufacturing costs as we seek to remain the innovation leader in medical imaging. In addition to the known applications in the cardiology and dental fields, Axsun's unique technology has the potential to expand OCT applications into a number of new platforms serving large markets in the healthcare sector, including peripheral vascular, neurovascular, cancer and ophthalmology," he added.
Axsun OCT tunable laser module. (Source: Volcano Corp.)
"We are thrilled to become a part of the Volcano organization. Axsun has developed an entirely new class of tunable optical engines based upon our unique MEMS based technology platform," commented Dale Flanders, president/CEO of Axsun, in a statement. "It is clear that medical imaging represents one of the largest growth markets in which to fully exploit this technology. Our capability of precise imaging is delivered with a level of performance and on a scale of miniaturization and at a cost that should enable significant expansion of varied market opportunities in a number of medical specialties. We are also pleased to merge with a company with the resources and managerial strength of Volcano to help us build on our leadership position in the communications and industrial spectroscopy markets.