Women's health companies Hologic, Cytyc merge
Two New England companies are merging to become one of the largest women’s health care product marketers in the world, according to The New York Times
Bedford, Mass.-based Hologic, Inc. and Marlborough, Mass.-based Cytyc Corporation will combine to become a $10 billion company called Hologic. Cytyc will become a wholly owned subsidiary.
The deal, worth about $6.2 billion in stock transactions, is expected to be completed at the end of the third quarter of 2007. The company will operate in over 20 countries with more than 3,300 employees, including 1,200 sales and service professionals.
“This combination brings together two well-respected industry leaders in the women’s healthcare and diagnostics marketplace,” Hologic’s Chief Executive Officer Jack Cumming said in a statement. “By combining our companies’ complementary, best-in-class products and technologies, we expect to drive enhanced growth and value creation.”
Cytyc is a diagnostic and medical device company that designs, develops, manufactures and markets diagnostic and surgical products. Cytyc’s products cover women’s health applications including cervical cancer screening, preterm birth screening, treatment of excessive menstrual bleeding, radiation treatment of early-stage breast cancer and radiation treatment of patients with malignant brain tumors.
Hologic develops, manufactures and supplies diagnostic and medical imaging systems including digital radiography and breast imaging. Hologic’s core business units are focused on mammography and breast biopsy, osteoporosis assessment, and mini C-arm and extremity MRI imaging for orthopedic applications.
While most functions for Cytyc
will remain at their respective headquarters, sales and marketing synergies are expected to drive big profits.
According to Hologic, the merger will create the largest sales and service organization exclusively focused on women’s health in the diagnostic and medical technology industry in the United States.
While Hologic has primarily used distributors to sell its products overseas, Cytyc brings a large international sales force that could sell a more complete suite of women’s health products. The sales force will consist of 900 sales people in the United States and 300 more worldwide.
Hologic is banking on considerable cross-selling opportunities among Cytyc’s obstetrics and gynecologic and its own breast cancer products. Hologic projects revenues will exceed $1.7 billion in 2008. New sales alone are expected to enhance revenue growth by more than $75 million within the first three years after the merger closes.
“We expect to realize the benefits of this combination quickly and efficiently,” CEO Cumming said.
Hologic also anticipates cost savings from the merger will reach $25 million to $30 million. For 2007, the companies project identical revenues of about $730 million each.
According to The List Database, Hologic has no agency relationships.
This is an ideal time to approach Hologic on the highest levels with strategies to combine sales and marketing forces to generate the huge hoped-for revenues. There should be plenty of work in revamping collateral materials to reflect the new menu of products and services for women. Filled with ambition, the company may be willing to bolster sales and marketing channels with increased medical journal advertising and perhaps some direct to consumer campaigns.