Align acquires Cadent

March 29, 2011
Acquisition accelerates Align's adoption of Invisalign.

SAN JOSE, California--Align Technology has announced signing a definitive agreement to acquire privately held Cadent Holdings, a provider of 3D digital scanning solutions for orthodontics and dentistry based in Carlstadt, N.J.

To read more about Align Technology, go to Align Technology.

Cadent strengthens Align's ability to drive adoption of Invisalign by integrating Invisalign treatment more fully with mainstream tools and procedures in doctors' practices. The combination of the two companies will help accelerate
the use of intraoral scanning in the dental industry by leveraging Align's global sales reach, extensive professional and consumer marketing capabilities and base of more than 55,000 users.

During the next five years, intraoral scanners should become widely used in dental practices, and intraoral scanning technology could transform the dental industry. According to iData Research, the growth rate for intraoral scanners will exceed 20% between 2010 and 2015.

The acquisition of Cadent extends Align's strategic leverage by demonstrating the value of applications at chairside that simplify and streamline treatment, and make the Invisalign procedure easier on the patient and more efficient for the practice. In addition, the use of digital technologies for restorative dentistry, such as CAD/CAM or in-office restorations, has also been growing rapidly and intraoral scanning is required to enable this essential part of dental practices.

The acquisition of Cadent positions Align as a leader in one of the best growth opportunities in dentistry and medical devices today.

"We are excited about the opportunities for growth that Cadent provides, not only in terms of accelerating adoption of intraoral scanning among dental professionals but also in creating greater value for existing Invisalign users," said Thomas M. Prescott, Align Technology president and chief executive officer. "Cadent has a strong team of very talented people and a culture similar to ours with the drive, agility and speed necessary to continue delivering innovative solutions for our customers."

Cadent leads the intraoral scanning industry in digital optics and powder-less scanning. The company's overall technology is near the forefront of the industry trend toward greater use of digital imaging solutions expected to become more widely used in dental practices.

Cadent brings complimentary market knowledge and technology in CAD/CAM restorative dentistry to Align, including capabilities in digital records storage and digital impressions for fabrication of crown and bridge, veneers, implants, and other restorative procedures. Like Align, Cadent also has strong expertise in advanced digital modeling, robust software development, and integrated systems.

Cadent has a portfolio of best-in-class products and services for restorative dentistry and orthodontics that include the iTero and iOC intra-oral scanners. Cadent's iTero technology provides dentists with a range of restorative choices, flexibility to choose labs and fabrication processes, and control in providing a high standard of
care for patients.

Cadent's iOC technology, used primarily by orthodontists, ensures a more accurate first impression, enables high value clinical applications and a better patient experience. Cadent also has a range of leading orthodontic services and products including OrthoCAD iQ, OrthoCAD iCast, and OrthoCAD iRecord.

The acquisition of Cadent follows the January 2011 announcement of a joint development agreement between Align and Cadent to co-develop Invisalign software applications that will run on Cadent scanners. The acquisition builds on the development agreement by providing a dedicated digital scanning platform for delivering Invisalign
chairside applications to dental practitioners and extends Align's presence into restorative dentistry.

The combination of the two companies' market leading positions and technologies provides an opportunity to create growth and to build value for customers and shareholders.

As part of an ongoing program to evaluate interoperability of intraoral scanning systems for future use with Invisalign treatment, Align is in final beta tests with Cadent's systems and expects to announce interoperability for their scanners in the second quarter of 2011.

Under the terms of the agreement, Align will pay approximately $190 million in cash in exchange for all shares of Cadent. The acquisition is subject to various standard closing conditions, including the expiration of the applicable waiting period under the Hart Scott Rodino Act, and is expected to close during the second quarter of 2011.

Align anticipates that the acquisition of Cadent, on a GAAP basis, will dilute fiscal 2011 earnings per share and expects non-GAAP diluted EPS for the year to be in a range of $0.70 to $0.75, excluding acquisition related costs, consisting of amortization of acquired intangibles, transaction related costs and employee retention program costs.

The company expects the transaction to be accretive to non-GAAP EPS for fiscal 2012, excluding acquisition related costs, consisting of amortization of acquired intangibles and employee retention program costs.

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