Align
Technology, Inc. (NASDAQ: ALGN) recently publicized it has reached a settlement
with Ormco Corporation, a subsidiary of Danaher Corporation (NYSE: DHR). The
agreement includes an end to all pending litigation between the parties and to
begin a new strategic collaboration.
As part of the settlement, Align will make
a cash payment of approximately $13 million to Ormco and issue approximately
7.6 million shares of Align's Common Stock to Danaher Corporation, Ormco's
ultimate parent. Post issuance that will
be equal to approximately ten percent ownership interest in Align. Based on the
closing price of Align's Common Stock on Friday, August 14, 2009 the value of
the shares is approximately $77 million. The issuance of a portion of the
shares is subject to clearance under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
Align and
Ormco have also agreed upon an exclusive collaboration over the next seven
years to develop and market an orthodontic product that combines the Invisalign
system with Ormco's Insignia orthodontic brackets and arch wires system to
treat the most complex cases. Each party will retain ownership of its
pre-existing intellectual property, and each party will be granted intellectual
property licenses in their respective field for jointly-developed combination
products.
"We
are pleased to resolve this ongoing litigation with Ormco and to begin a new
relationship that meets our shared goals of providing innovative products and
excellent service to our orthodontic customers," said Thomas M. Prescott,
Align Technology president and CEO. "This collaboration with Ormco, a
fellow innovator in digital orthodontics, gives us the ability to compete for a
segment of the market that is difficult to treat with Invisalign alone, and
accelerates our long-term plan for a combination product."
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