SAN DIEGO, Dec. 23 Volcano Corporation(Nasdaq: VOLC), a leader in the development, manufacturing and sales ofproducts for the diagnosis and treatment of coronary and peripheral arterydisease, said today that it has entered into a definitive agreement to acquireAxsun Technologies, Inc., a privately-held company that is a leading developerand manufacturer of lasers and optical engines used in medical OpticalCoherence Tomography (OCT) imaging systems and advanced photonic componentsand subsystems used in other industrial applications.
Based in the Boston area, Axsun currently has development partnershipswith companies serving the cardiology and dental markets and expects thelaunch of the first medical imaging systems utilizing its technology duringthe first half of 2009. Volcano said it plans to utilize new integratedversions of Axsun's advanced tunable laser and optical engine technology inthe development of certain new OCT imaging systems. Axsun also offers devicesfor industrial applications and the telecommunications network sector, whereit has an estimated 50 percent share of the high-performance segment of theoptical monitoring market. The company has more than 90 US patents issued,with another 40 pending, and has approximately 85 employees. Axsun recordedrevenues from continuing operations in excess of $18 million in calendar 2007.
Under terms of the acquisition agreement, Volcano will pay approximately$21.5 million in cash at closing, which is expected to occur next week. Axsunwill operate as a wholly-owned subsidiary of Volcano.
"Axsun is another complementary and important transaction for Volcano asit provides us proprietary OCT technology that we believe will both accelerateour OCT product development efforts and provide us significant and sustainablecompetitive advantages in the invasive imaging arena. We believe OCTtechnology will extend Volcano's reach to clinical indications and researchopportunities that represent sizeable market opportunities that are beyondthose served by our current offerings," said Scott Huennekens, president andchief executive officer of Volcano.
The company said that it expects this transaction to be neutral toconsolidated earnings per share in fiscal 2009 and that following completionof the transaction it will have more than $145 million in cash, with no debt.The company said it will provide additional details on the financial impact ofthe transaction when it provides 2009 guidance during its fourth quarterearnings conference call in mid-February.
Axsun's technology and laser components allow for dramatic imagingperformance improvements in equipment form factors as small as 1/1000th thesize of current laser components at very low manufacturing costs.
"The Axsun laser and optical engine technology is a key building block inour strategy to cement our already strong position in invasive imaging,"Huennekens continued. "The company's core technologies are truly leading-edgeand will advance our programs to both enhance system performance and achievelower manufacturing costs as we seek to remain the innovation leader inmedical imaging. In addition to the known applications in the cardiology anddental fields, Axsun's unique technology has the potential to expand OCTapplications into a number of new platforms serving large markets in thehealthcare sector, including peripheral vascular, neurovascular, cancer andophthalmology," he added.
In addition to the products and components directed at the medical imagingmarket, Axsun also presently markets a closely related line of photonicsproducts and measurement equipment into industrial spectroscopy and opticalcommunications markets. The intellectual property, manufacturing andprocesses used in the industrial and communications markets are highlycomplementary and provide operational and financial leverage across the entirebusiness. Axsun's optical network monitoring products are regarded as leadersin the industry from a performance and reliability perspective.
"The industrial/communications segment of the business is run by a highlycompetent and experienced team within Axsun and we expect that it willcontinue to flourish and provide the overall organization with operationalleverage," Huennekens commented. "We are pleased to be able to add thisextraordinary level of technology and capability to the Volcano organizationalong with the significant future potential of the OCT market opportunitiesthrough a transaction that will have a modest impact on our cash balance andnot impact our ability to achieve profitability."
Dale Flanders, president and chief executive officer of Axsun commented,"We are thrilled to become a part of the Volcano organization. Axsun hasdeveloped an entirely new class of tunable optical engines based upon ourunique MEMS based technology platform. It is clear that medical imagingrepresents one of the largest growth markets in which to fully exploit thistechnology. Our capability of precise imaging is delivered with a level ofperformance and on a scale of miniaturization and at a cost that should enablesignificant expansion of varied market opportunities in a number of medicalspecialties. We are also pleased to merge with a company with the resourcesand managerial strength of Volcano to help us build on our leadership positionin the communications and industrial spectroscopy markets.
The company will hold a conference call at 10 a.m., Pacific Standard Time(1 p.m., Eastern Standard Time), Tuesday, January 6, to discuss thistransaction. The teleconference can be accessed by calling (719) 325-4842,passcode 8476994, or via the company's website at http://www.volcanocorp.com.Please dial in or access the webcast 10-15 minutes prior to the beginning ofthe call. A replay of the conference call will be available throughJanuary 13, at (719) 457-0820, passcode 8476994 and via the company's website.
Volcano Corporation (NASDAQ: VOLC) offers a broad suite of devicesdesigned to facilitate endovascular procedures, enhance the diagnosis ofvascular and structural heart disease and guide optimal therapies. Thecompany's intravascular ultrasound (IVUS) product line includes ultrasoundconsoles that can be integrated directly into virtually any modern cath lab.Volcano IVUS offers unique features, including both single-use phased arrayand rotational IVUS imaging catheters, and advanced functionality options,such as VH(R) IVUS tissue characterization and ChromaFlo(R). Volcano alsoprovides functional measurement (FM) consoles and single-use pressure and flowguide wires and is developing a line of ultra-high resolution OpticalCoherence Tomography (OCT) systems and catheters. Currently, more than 3,700Volcano IVUS and FM systems are installed worldwide, with approximately halfof its revenues coming from outside the United States. For more information,visit the company's website at http://www.volcanocorp.com.
Axsun Technologies, Inc.
Axsun Technologies, Inc., established in 1998, develops and manufacturesMEMS-based lasers and optical engines used in OCT imaging systems, micro-optical spectrometers and optical channel monitors for pharmaceutical,chemical and petrochemical and telecom network applications. Through itsexpertise in micro-optics, packaging and precision engineering, Axsun haspioneered an entirely new class of high-performance, miniaturizedspectroscopic instruments and devices enabling a dramatic shift from lab-basedmeasurements to on-line and at-line measurements, without compromisingperformance. Further information can be found at http://www.axsun.com.
This news release contains forward-looking statements within the meaningof the U.S. Private Securities Litigation Reform Act of 1995. Any statementsin this news release regarding the Axsun acquisition, Volcano's business andtechnology and Axsun's business and technology that are not historical factsmay be considered "forward-looking statements," including statements regardingthe expected benefits to Volcano of the acquisition, the complementary natureof each company's technology and skill sets to the other, the expected market,including its size, to be addressed by Volcano's products and Axsun'sproducts, Volcano's potential development of OCT imaging systems utilizingAxsun's technology and long-term goals from the Axsun acquisition, thefeatures of Axsun's technology, the timing of the introduction of Axsun'simaging systems and its benefits and potential and the expected financialimpact of the acquisition. Forward-looking statements are based onmanagement's current preliminary expectations and are subject to risks anduncertainties, which may cause Volcano's results to differ materially andadversely from the statements contained herein. Some of the potential risksand uncertainties that could cause actual results to differ from the resultspredicted including risks and uncertainties relating to the integration ofacquisitions and unexpected costs incurred in connection with acquisitions andother risks detailed in the company's annual report on Form 10-K, quarterlyreports on Form 10-Q and other filings made with the Securities and ExchangeCommission. Undue reliance should not be placed on forward-looking statements,which speak only as of the date they are made. Volcano undertakes noobligation to update any forward-looking statements to reflect newinformation, events or circumstances after the date they were made, or toreflect the occurrence of unanticipated events.
SOURCE Volcano Corporation