Byline: Lisa Eckelbecker
MARLBORO - Shares of Cytyc Corp. shot up yesterday, as the medical device company that had spent months acquiring other businesses explained that it agreed to be acquired by Hologic Corp. because of the two companies' combined strength.
"There is not a better combination in the industry, and it's better to be together than it is apart," said Cytyc Chairman, President and Chief Executive Patrick J. Sullivan, speaking to analysts in a conference call.
Cytyc shares rose $7.95 yesterday, or nearly 23 percent, to $43 a share as Wall Street digested news of the $6.2 billion deal, which was announced Sunday afternoon. Bedford-based Hologic stock fell $3.61 yesterday to $54 a share. Both companies' stock trades on the Nasdaq Stock Market.
Cytyc and Hologic make medical devices and equipment related to women's health. Cytyc's leading product is the ThinPrep Pap test, which includes disposable products and equipment that allows experts to view slides.
The company also produces NovaSure equipment to treat excessive menstrual bleeding, and MammoSite equipment to shoot radiation therapy directly into breast cancer sites.
Hologic's biggest product sales are in mammography and breast care, including its Selenia digital mammography equipment.
Together, the companies have more than $1 billion in sales, and several hundred sales workers who call upon obstetricians, gynecologists, radiologists, oncologists and other specialists.
Some analysts said the merger agreement came as a surprise, because Cytyc had been seen as an acquirer rather than a target, and because Hologic had occasionally been rumored to be a target of bigger medical-device makers.
"It's a surprising transaction, but at the same time, when you get a little bit of time to think about it, it makes a lot of sense," said Isaac Ro, a senior analyst at Leerink Swann & Co. in Boston who follows Hologic.
Medical device companies have been signing merger and acquisition agreements at a healthy pace this year, driven by a desire to snap up technologies that allow medical professionals to diagnose health problems, according to a report from Irving Levin Associates Inc. of Norwalk, Conn. During the first three months of the year, medical device companies in the United States signed on to 39 merger-and-acquisition deals worth $23.1 billion. That was 11 percent more deals than the pace recorded at the same time last year, Levin reported.
Cytyc fueled some of that deal-making. The...