Eckert & Ziegler Strahlen- und Medizintechnik AG

M&A Activity • Mar 17, 2011

News Details

Corporate | 17 March 2011 17:44

Eckert & Ziegler announces offer to Board to Acquire Theragenics

Eckert & Ziegler Strahlen- und Medizintechnik AG / Key word(s): Offer

17.03.2011 / 17:44

Berlin, March, 17, 2011. Eckert & Ziegler Strahlen- und Medizintechnik AG
(ISIN DE0005659700) has announced today that it has submitted a non-binding
proposal to the Board of Directors of Theragenics Corporation (NYSE: TGX),
based in Buford, Georgia, USA to acquire, either directly or through IBt
Bebig, all the outstanding shares of Theragenics for $2.20 per share, in
cash. The offer represents a total equity value of approximately $74
million and a premium of 38.4% over Theragenics' closing stock price on
March 16, 2011. The offer also represents a premium of 15.8% over the 52
week high trading price of Theragenics stock.

The non-binding offer, which was made on February 8, 2011, and rejected by
Theragenics on March 11, 2011, was reiterated in a letter sent today to
Theragenics' Board of Directors. Theragenics has been unwilling to engage
in discussions with Eckert & Ziegler. Eckert & Ziegler is disclosing the
contents of its letter and non-binding offer in order to inform
Theragenics' shareholders of the significant shareholder value and
compelling strategic fit inherent in a combination of the two companies.

Eckert & Ziegler has named Canaccord Genuity, based in Boston,
Massachusetts, USA, as its U.S. Financial advisor and Equinet Bank AG,
based in Frankfurt, Germany, as its European Financial advisor. Eckert &
Ziegler has secured several support letters from major financial
institutions and is confident of its ability to finance the transaction.

'We believe this proposed combination provides superior value to our
respective shareholders and will enable us to offer better products, better
services and innovation to our customers,' said Dr. Andreas Eckert, CEO of
Eckert & Ziegler and Chairman of the Board of IBt Bebig. 'We continue to
believe that our all cash offer of $2.20 per share is a highly welcome and
fair exit for shareholders of Theragenics. We are disappointed that the
Theragenics Board of Directors has thus far refused to engage in a
discussion of acceptable terms. However we remain committed to the
transaction and are prepared to consider all alternatives to successfully
complete this transaction.'

No decisions have been taken about the final form and structure that a
combination of the two radiation therapy businesses might have. The
Executive Directors and the Board of IBt Bebig, however, have been closely
involved in the Eckert & Ziegler discussions regarding Theragenics and
support an integration of the Theragenics businesses into the IBt Bebig
structures.

At this stage, there can also be no assurance that any agreement could be
reached between the Eckert & Ziegler AG and Theragenics. Neither the
letters to the Theragenics' Board of Directors nor this press release
constitute an offer to the Theragenics' shareholders nor do they constitute
a statement of current intention to commence a tender offer to the
Theragenics shareholders.

'Since the merger of IBt and Bebig that started in 2008, our strategy is to
create a true international Group with a strong ambition to become a world
leader in Brachytherapy. With this planned acquisition we would move one
step forward, as we would re-enter in the United States, the largest
brachytherapy market. We are the best strategic partner to expand the
potential of Theragenics and together broaden the product portfolio with
our SmartSeed(R) and MultiSource(R) Afterloader', commented Dr. Edgar
Löffler Managing Director of IBt Bebig.

Permanent Brachytherapy has faced strong competition in recent years from
more expensive alternative treatment options, including Intensity Modulated
Radiation Therapy (IMRT) and Robotic Surgery. As health care costs are
rising and are a key concern in most countries, the Management of IBt Bebig
sees a real opportunity to further promote Permanent Brachytherapy, a
minimally invasive one day procedure, as an effective and economical
treatment option.

'We have great respect for Theragenics, one of the leading Brachytherapy
companies in the US. We have known them a long time, since IBt was founded
in 1996 by a few former Theragenics Executives. We have the same vision,
that Brachytherapy is a well tolerated treatment option to cure cancer and
aligned to patient requirements. Our combined company will be uniquely
positioned to further promote this efficient and economical treatment
option worldwide', commented Dr. Gunnar Mann, Managing Director of IBt
Bebig.

The complete text of Eckert & Ziegler's letter to the Theragenics Board and
Theragenics response to our original offer is set forth below. The original
letters can be downloaded at: www.ezag.de/downloads/TGX_Letters.pdf

Copy of letter from Theragenics Corp. to Eckert & Ziegler dated March 11,
2011:

March 11, 2011

Dr. Andreas Eckert
Eckert & Ziegler Strahlen- und Medizintechnik AG
Robert-Rössle-Str. 10
D-13125 Berlin - Germany

Re: Theragenics Corporation

Dear Dr. Eckert,

The Board of Directors of Theragenics Corporation has evaluated your letter
dated February 8, 2011 outlining your proposal to acquire all of the
outstanding shares of Theragenics common stock for $2.20 per share in cash.

After careful and thorough evaluation of your proposal and the limited
information provided regarding your financing plan, and with the assistance
of our financial and legal advisors, our Board has determined that your
proposal grossly undervalues our business and prospects, and therefore is
inadequate and not in the best interests of Theragenics and its
stockholders. Our Board has unanimously determined that it is not advisable
for Theragenics to pursue a sale of the Company at this time. Based on the
foregoing, the Board believes that it is highly unlikely that further
discussions with you would results in a proposal that is in the best
interests of Theragenics and its stockholders. Therefore, our Board has
also unanimously determined not to pursue your proposal further and will
continue to focus on our business and executing our strategic plan.

Very truly yours,

M. Christine Jacobs
Chairman of the Board

Copy of letter from Eckert & Ziegler to Theragenics Corp. dated March 17,
2011:

Berlin, 17.03.2011

Offer Letter
Ladies and Gentlemen:
As you are aware, we are very interested in pursuing an acquisition
opportunity with your company and we regret that you have refused to engage
in any discussions whatsoever regarding a potential combination and, by
your letter of March 11, 2011, rejected our offer of February 8, 2011.
Having been unsuccessful in moving forward privately, due to your
unwillingness to engage in any discussion, we believe that the
opportunities for our respective companies are so compelling that it is
important to make our proposal public, which we are doing contemporaneously
herewith.
Eckert & Ziegler, either directly or through an affiliate (such as IBt
Bebig) or subsidiary, is offering to acquire all of the issued and
outstanding shares of the common stock (the 'Common Stock') of Theragenics
Corporation, a Delaware corporation (the 'Company'), for $2.20 per share of
Common Stock, payable in cash, subject to the terms and conditions set
forth below (the 'Offer'). This price, which represents a total equity
value of approximately $74 million, would represent a premium of 38.4% over
the closing price per share of the Common Stock on March 16, 2011. The
offer also represents a premium of 15.8% over Theragenics' 52 week high
trading price. We believe the Offer represents a significant opportunity
for Theragenics shareholders to realize a premium on their investment,
rather than remain subject to the significant market and execution risk
associated with the long term standalone business prospects of Theragenics.
In addition, we believe that, if Eckert & Ziegler were provided the
opportunity to conduct limited due diligence with respect to Theragenics
business, in particular its Surgical Products segment, we could be in a
position to increase the Offer. Your refusal to engage in any negotiated
process whatsoever currently precludes such a possibility.
Our board of directors unanimously supports a combination with the Company.
We have been working extensively with legal, accounting and financial
advisors and financing sources to be in a position to move forward with the
Offer expeditiously. We and our counsel believe that there are no
regulatory impediments to consummating the Offer, and our proposal is not
subject to a financing condition.
The Offer is conditioned upon and subject to: (i) the redemption by the
Company's board of directors of the amended and restated stockholder rights
plan described in the Company's Registration Statement on Form 8-A filed
with the Securities and Exchange Commission on February 16, 2007; (ii) the
waiver by the Company's board of directors of the applicable provisions of
Section 203 of the Delaware General Corporation Law; (iii) the negotiation,
execution and delivery of a definitive acquisition agreement, in mutually
satisfactory form (the 'Acquisition Agreement'); and (iv) the requisite
approval, if any, by any governmental or regulatory agencies to the
transaction contemplated by this letter and the obtaining of all other
necessary and agreed upon material third party consents.
We believe the rationale for this combination is clear. Eckert & Ziegler,
which is publicly traded in the prime standard of the Frankfurt Stock
Exchange (FSE) as well as on all other German Stock Exchanges, is a
globally active isotope technology company with gross sales of $134 million
in 2009 and $148 million in 2010. Through our consolidated subsidiaries,
we process radioisotopes as well as develop, manufacture and sell isotope
technology components, medical technology equipment and related products.
Major areas of application for our products include medical equipment,
especially for cancer therapy, as well as medical nuclear imaging,
radiopharmaceuticals and industrial metrology. Due to our familiarity with
these industries and products, we believe that we are well-positioned to
integrate the Company's brachytherapy seed business with our global product
offerings and significantly expand this business through our existing
global marketing and distribution channels.
Having been unable to engage in any substantive discussions with the
Company's board of directors and management (beyond our meeting on February
8, 2011), we believe it is in the best interests of the Company's
stockholders to know of this proposal. We do not currently plan, and this
letter does not constitute, evidence of an intention to commence a tender
offer for all of the out-standing shares of the Company's Common Stock
and/or to engage in a solicitation of proxies in support of a slate of
directors that we would nominate for election to the Company's board of
directors that will better appreciate this opportunity, although we reserve
the right to do so in the future.
This letter does not constitute or create, and shall not be deemed to
constitute or create, any legally binding or enforceable obligation on the
part of any party. No such obligation shall be created, except by the
signing and delivery of the Acquisition Agreement, containing such terms of
the proposed transaction as shall be agreed upon by the parties, and then
only in accordance with the terms and conditions of such Acquisition
Agreement.
We urge a timely response and favorable consideration. Accordingly, we
request that you respond to us by 5:00 p.m. EST, on Friday, March 25, 2011.

Very truly yours,

Dr. Andreas Eckert Dr. Edgar Löffler
Chairman of the Board Member of the Board

The Eckert & Ziegler Group with more than 550 employees, is one of the
world's largest providers of isotope component technology for radiation
therapy and nuclear medicine.

End of Corporate News

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Language: English
Company: Eckert & Ziegler Strahlen- und Medizintechnik AG
Robert-Rössle-Str.10
13125 Berlin
Deutschland
Phone: 49 30 941084-138
Fax: 49 30 941084-112
E-mail: karolin.riehle@ezag.de
Internet: www.ezag.de
ISIN: DE0005659700
WKN: 565970
Listed: Regulierter Markt in Frankfurt (Prime Standard), Stuttgart;
Freiverkehr in Berlin, Düsseldorf, Hamburg, München

End of News DGAP News-Service

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