An Illinois-based company has raised its offer to take over Ottawa’s Nordion after another potential buyer submitted a higher bid for the company.
Nordion's Steve West. (Photo supplied)
By Jacob Serebrin
Sterigenics is now offering US$13 a share, or more than $811 million, to acquire the medical isotope and sterilization company, Nordion (TSX:NDN) (NYSE:NDZ) said in a release on Monday.
That’s up from the $12.25 a share, or $760 million, Sterigenics was offering late last week.
The increase comes after another unnamed potential buyer offered $12.50 a share on May 30.
Sterigenics, owned by Chicago-based private equity firm GTCR LLC, had previously refused to increase its offer after a vote on the deal looked likely to fall slightly short of the two-thirds majority required for its approval on May 23.
A second proxy vote, which ended on May 30, saw support for the offer increase by less than one percentage point, to 65.2 per cent of shares. The deal requires the support of 66.7 per cent to pass.
Sterigenics’ new offer, like the previous one, has the full backing of Nordion’s board of directors.
As a result of the new offer, Nordion has postponed a shareholder’s meeting originally scheduled for Tuesday until Friday, with a proxy voting deadline of Wednesday, in an effort to secure sufficient support for the deal.
The increased offer comes the same day as Nordion reported strong results during its second quarter. The release of quarterly financials on Monday came two days earlier than scheduled.
The company saw revenue increase 33 per cent to $74.7 million during the three-month period that ended April 30. That is an increase from the $56.1 million in revenue it reported during the same period last year.
The company’s net income increased to $6.7 million from $731,000 last year – a rise of 817 per cent.
“Nordion delivered strong results in its second quarter, in line with our expectations,” CEO Steve West said in a release. “We continue to focus and execute on opportunities in both our Sterilization Technologies and Medical Isotopes businesses.”
The jump in revenue was driven by increased sales in both Nordion’s sterilization technologies and medical isotopes divisions.
The company said increased orders for isotopes used in sterilization were driven by one competitor leaving the market, though the company warns that the former competitor's supplier appears to be preparing to start selling directly to customers or searching for another distributor.
On the medical isotopes side, Nordion credited the increased sales to supply interruptions at competitors in both Europe and South Africa.
The company wouldn’t say much about why the results were released early.
“We decided it was in the best interests of Nordion and its shareholders to release the quarter results ahead of schedule,” Tamra Benjamin, Nordion’s vice-president for public and government relations, wrote in an e-mail to OBJ. A conference call with investors that had been scheduled for Wednesday has been cancelled.