April 11, 2008, Andover, MA--Diomed, a developer and marketer of minimally invasive medical technologies including the patented EVLT laser treatment for varicose veins, has entered into an asset purchase agreement with AngioDynamics for the sale of Diomed's U.S. operations for $8 million in cash.
The assets subject to the agreement exclude the proceeds of Diomed's settlement of its '777 patent litigation with AngioDynamics, under which AngioDynamics agreed to pay $7 million, and the proceeds of Diomed's anticipated $3.6 million settlement with Vascular Solutions, now pending bankruptcy court approval, as well as certain patents.
On March 14, Diomed Holdings and its wholly-owned subsidiary, Diomed filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Massachusetts, Western Division. Since that time, Diomed has been operating as a debtor-in-possession while pursuing the sale of its U.S. operating assets. Diomed expects to complete the asset sale to AngioDynamics within approximately 60 to 90 days and to sell its remaining assets in due course, subject to the approval of the bankruptcy court.
AngioDynamics has also agreed to pay $3 million in cash for certain of the assets of Diomed Ltd., the UK subsidiary of Diomed Inc., which filed for insolvency administration under the laws of the United Kingdom contemporaneously with Diomed's bankruptcy filing in the United States. The closing of AngioDynamics' agreement with Diomed Holdings is conditioned upon AngioDynamics' acquisition of Diomed Ltd's assets and is subject to, among other conditions, court approval and an auction process administered by the courts, under which other interested parties may present competing offers.
The asset purchase agreement contemplates that Diomed will use its existing cash, receivables and ongoing revenues to fund its operations while it operates under Chapter 11, and, if necessary, may include up to $1.3 million in debtor-in-possession financing from AngioDynamics. The contemplated debtor-in-possession financing will also be subject to bankruptcy court approval.
"We believe that AngioDynamics' acquisition of Diomed's business provides our loyal physician partners the best opportunity for a continuation of superior customer service, an expanded flow of new and innovative technologies, and continuity of laser and disposable product supply," said James Wylie, Jr., Diomed's CEO. "Additionally, Diomed's EndoVenous Laser business is a terrific fit with AngioDynamics' venous product line--a win-win for patients and physicians alike."