Cytyc shares jump on acquisition by Hologic

Hologic Inc. has agreed to acquire Cytyc Corp. for $6.2 billion, pairing two Massachusetts-based makers of women's health care technology in a deal that sent Cytyc's shares up 22 percent today.

The two companies announced the cash and stock transaction on Sunday, saying it had been unanimously approved by the companies' boards of directors.

On a conference call with analysts earlier today, Jack Cumming, Hologic's chairman and chief executive, said the two companies were "kindred spirits" with complementary women's health product offerings and headquarters just 15 miles apart. The firms had long considered pairing up, and the idea gained momentum after Bedford-based Hologic approached Marlborough-based Cytyc a few months ago about a possible deal.

"It's better to be together than it is apart," Patrick Sullivan, Cytyc's chairman, president and chief executive told analysts.

The combination is expected to drive cross-selling across units of the new company, generating more than $75 million in extra revenues within the first three years. Greater efficiency in marketing, purchasing, logistics and shared administrative services are expected to generate $25 million to $30 million in annual cost savings, the companies said.

Shares of Cytyc rose $7.78 to $42.83 in morning trading, while shares of Hologic fell $4.62, or 8 percent, to $52.99.

Under the terms of the deal, Cytyc shareholders will receive 0.52 share of Hologic common stock and $16.50 in cash for each share of Cytyc common stock they own. That translates to $46.46 per share, or a premium of about 33 percent over Cytyc shares' closing price Friday of $35.05.

The combined company will be called Hologic, and Cytyc will become its wholly owned subsidiary. It will be one of the largest companies in the world that focuses exclusively on technology in women's health, including screening, diagnostics and therapeutics for breast and cervical cancers, prenatal health, osteoporosis and permanent contraception, the companies said.

"By combining our companies' complementary, best-in-class products and technologies, we expect to drive enhanced growth and value creation," Cumming said.

"This is a great transaction that provides Cytyc shareholders with enhanced value both today and over the long-term," Sullivan said.

After the deal's expected closure in this year's third quarter, Sullivan will become the combined company's chairman and Cumming will become chief executive. The board will consist of six members nominated by Hologic and five from Cytyc.

The deal is subject to regulatory approval, but company officials said they expect no major hurdles because their products and services do not overlap. The deal also must be approved by both companies' shareholders. (AP)