UPDATE 2-Isotope supplier Nordion to go private in $727 mln deal

Fri Mar 28, 2014 9:32pm EDT
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(Adds comment from spokesman for Canadian industry minister)

March 28 (Reuters) - Sterigenics, a sterilization services provider owned by private equity firm GTCR LLC, has reached a deal to buy Canadian medical isotopes supplier Nordion Inc for $727 million.

The offer of $11.75 per share represents a 12 percent premium to Nordion's closing price on the New York Stock Exchange on Thursday, the companies said.

"That's basically what our fair value was (for Nordion), so we think they're getting a fair price," Morningstar analyst David Krempa said.

Nordion's U.S.-listed stock trades at 8.3 times forward earnings, a slight discount to the sector median of 11.4.

Nordion is one of the world's leading producers of molybdenum-99, an isotope used in medical imaging, and the company depends on raw material from an ageing Atomic Energy of Canada Ltd (AECL) facility in Chalk River, Ontario.

A medical isotope is a radioactive substance used mainly to diagnose illness.

The Canadian government said earlier on Friday it would remove the 25-percent foreign investment cap on Nordion in cases that are deemed to be of net benefit to Canada, under legislation introduced on Friday.

Industry Minister James Moore would have to approve the purchase for it to go forward. Asked if the minister would consider its takeover to be of net benefit to Canada, Moore spokesman Jake Enwright noted the government has a procedure for dealing with such offers.   Continued...