Hologic Acquires Leading Distributor of Medical Products in China

Hologic, Inc. (Bedford, MA, USA), a developer, manufacturer, and supplier of diagnostics, medical imaging systems, and surgical products focused on serving the healthcare needs of women, reported it has acquired TCT International Co., Ltd. (Beijing, China), a distributor of medical products, including Hologic's ThinPrep pap test, related instruments, and other diagnostic and surgical products.

TCT is a privately held distribution company, which employs over 500 people and possesses a large, established nationwide sales organization and customer support infrastructure. TCT management has extensive experience in developing markets for new technologies and has made ThinPrep a leading brand in China over the last 10 years. The TCT business will be integrated within Hologic's international operations.

"The acquisition of TCT is consistent with our strategy to expand our women's healthcare franchise globally," said Rob Cascella, president and chief executive officer. "TCT is positioned as a national distribution presence in both the ob/gyn and laboratory markets based primarily on the strength of its sales network. We firmly believe by controlling a distribution channel as extensive as TCT's, we can better leverage our entire product portfolio to drive growth across multiple market segments."

"We believe the combination of our strong sales and service organizations in China and Hologic's best-in-class product portfolio, specifically its ThinPrep pap test, makes this a perfect partnership," said Bing Xiang, TCT's general manager. "We share a common vision about the importance of providing our customers with innovative technology coupled with world class service and support. I am confident I speak on behalf of all TCT employees when I say we are excited about the opportunity to be a part of the Hologic team."

The purchase price for the transaction is US$135 million in cash (of which $35 million is deferred for one year), plus a two-year contingent earn out.

Rob Cascella further stated, "Our tuck-in acquisition strategy coupled with expanding our international presence in key markets is an important part of our five-year goal to extend our global leadership position and achieve double-digit revenues and earnings growth. We are extremely excited with this opportunity to expand our presence in China."

Hologic's core business units are focused on breast health, diagnostics, gyn surgical, and skeletal health. Hologic provides a comprehensive range of technologies with products for mammography and breast biopsy, radiation treatment for early-stage breast cancer, cervical cancer screening, treatment for menorrhagia and uterine fibroids, permanent contraception, osteoporosis assessment, preterm birth risk assessment, mini C-arm for extremity imaging, and molecular diagnostic products including human papillomavirus (HPV) and reagents for a variety of DNA and RNA analysis applications.

TCT is a distributor primarily of diagnostic products with a comprehensive distribution network throughout China. Currently TCT is Hologic's sole distributor in China of the following Hologic products: ThinPrep pap test and related instruments, rapid fetal fibronectin (fFN) test, and the NovaSure endometrial ablation device. A small portion of TCT's business consists of selling other diagnostic products. Moreover, TCT operates a central cytology laboratory to enable those provinces without adequate cytology resources to benefit from skilled resources in the central location, allowing them to read and diagnose the sample. TCT's laboratory also trains new cytologists on ThinPrep to enable them to become customers in their local labs.

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