NEEDHAM HEIGHTS, Mass. — Damon Corp. ended its seven-month struggle for independence today, agreeing to merge with Nomad Partners L. P. in a deal valuing the chemical laboratory company at $254.8 million.
Under the agreement, Damon's shareholders will receive $26 a share in cash and 50% of any after-tax cash proceeds from the sale of Damon's 61% stake in its biotechnology unit, Damon Biotech Inc.
Damon's board has approved the merger, the company said, and the proposal will be submitted for shareholder approval in a meeting to be held in the spring.
Damon, based in Needham Heights, Mass., provides clinical laboratory testing through a network of 12 regional labs and makes and markets laboratory equipment and diagnostic instruments. The company has an $18-million contract with the military, making it the largest U.S. tester for the AIDS virus.
Nomad, a partnership between Sherman Oaks-based American Magnetics Corp. and investment firm Ballantrae Partners L. P. of New York, bid $21.50 a share for Damon in June, 1988, later raising its offer to $24 a share.
Nomad said in December that it had received 5.8 million Damon shares under its tender offer, raising its potential stake in the group to 71.5%.
Nomad said it is ending its unsolicited tender for Damon as a result of the agreement.