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October 22, 2010 2:02 PM

Sidley, Latham on GE's $587 Million Acquisition of Clarient

Posted by Julie Triedman

GE Healthcare, a $16 billion unit of General Electric Company, agreed Friday to buy cancer diagnostic company Clarient, Inc.

It's the second big deal for GE since CEO Jeffrey Immelt announced in July that the company plans to deploy some of its $25 billion war chest for key acquisitions. Under the deal, GE will pay $587 million for the company--$5 per share--representing a 33.7 percent premium over Clarient's closing price Thursday. The acquisition is expected to speed up GE Healthcare's development of its molecular diagnostic business.

Two minority stockholders holding a total of 47 percent of Clarient's stock have already agreed to tender their shares, the companies announced. In July, Clarient said it expected its annual revenues to be roughly $108 million to $155 million for the 2010 calendar year, a growth of 18-25 percent over 2009.

GE turned to counsel from Sidley Austin, which represented the company just a few weeks ago on its $3 billion deal for Dresser Inc. Leading the Sidley legal team this time around is David Zampa, a corporate partner based in Chicago, who also represented the unit in 2007 in its proposed acquisition of the diagnostics and point-of-care businesses of Abbott Laboratories for $8.13 billion. (That deal was terminated after the two companies couldn't agree on final terms.)

Zampa has also been assisting GE Healthcare in its Healthymagination Fund, a new fund that is part of its $6 billion global initiative to make health care more affordable; earlier this year, he helped the fund make its first investment in a pioneering genomic diagnostics company, CardioDX.

Along with Zampa, Sidley's team in the Clarient deal included health care partner James Stansel (Washington, D.C.), tax partner Suresh Advani (Chicago); employee benefits partner Stewart Shepherd (Chicago); health care counsel Barbara Cammarata; and associates Matthew Gunnison, Camille Lu, and Anita Schausten.

GE Healthcare was also advised by its general counsel for strategic transactions, Elizabeth Newell, and its senior counsel for M&A, Derek Vander Heide.

Clarient relied on counsel from Latham & Watkins (which also worked opposite GE in the recent Dresser deal). Latham's team is led by Los Angeles M&A partner W. Alex Voxman in Los Angeles, the office's emerging companies practice group head; and corporate partner R. Scott Shean, the firm's Orange County head. Voxman has represented Clarient previously, according to his firm bio.

Clarient's L&W team also includes benefits and compensation partner James Barrall (Los Angeles); tax partner Laurence Stein (Los Angeles); IP partner Charles Hoyng (Silicon Valley); health care partner Daniel Settelmayer (Washington, D.C.); counsel Esther Scherb; and associates Thomas Asmar, Soo-Jean Chi, Thomas Halpern, Christopher Hazuka, David Lee, Jason Liljestrom, Richard H. Nettles, Betty Pang, Andrew Western, and Michael Young.

At Clarient, Melinda Griffith, senior vice president, corporate and legal affairs, corporate secretary and chief compliance officer, is managing the deal in-house.

JPMorgan is acting as financial adviser to GE Healthcare; Clarient tapped Goldman Sachs & Co. 

The tender offer is expected to begin in the next ten days and the transaction is expected to close late this year or early in 2011, pending regulatory approvals, the companies said. 

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