8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 4, 2007

VENTANA MEDICAL SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	000-20931	94-2976937
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1910 E. Innovation Park Drive, Tucson, Arizona	85755
(Address of principal executive offices)	(Zip Code)

(520) 887-2155

(Registrant’s telephone number, including area code)

Not Applicable

(Former Name or Former Address, if changed since last report.)

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On September 4, 2007, Ventana Medical Systems, Inc., a Delaware corporation (“Ventana” or the “Purchaser”) and the stockholders and optionholders (the “Sellers”) of Spring BioScience Corporation, a California S-corporation (“Spring”) entered into a Stock Purchase Agreement (the “Purchase Agreement”). Pursuant to the Purchase Agreement, Ventana purchased all of the issued and outstanding shares of common stock (the “Shares”) of Spring, which develops, supplies and sells reagents (including, but not limited to, bulk antibody reagents) for the immunohistochemistry market and the life science research market.

A copy of Ventana’s press release announcing the acquisition of Spring is filed as Exhibit 99.1 hereto.

The Purchase Agreement

At the closing of the acquisition (the “Closing”) each of the Sellers sold all of his or her Shares to Ventana in exchange for his or her pro rata share of the aggregate Purchase Price (as defined below). After the Closing, Spring became a wholly owned subsidiary of Ventana.

Under the terms of the Purchase Agreement, Ventana paid the Sellers $28.9 million in cash at the Closing. Ventana also deposited $11.7 million in an escrow account (i) as security for certain indemnification obligations that might arise under the Purchase Agreement (which are described in more detail below) and (ii) to provide for additional payments to the Sellers upon Spring’s achievement of the scientific milestones. The Purchase Agreement therefore provides for an aggregate “Purchase Price” of up to $40.6 million, subject to certain adjustments based on Spring’s working capital as of the Closing.

The Purchase Agreement contains customary representations and warranties of the parties, most of which survive for a period of two years after the Closing. Certain representations and warranties of the Sellers, including those relating to the capital structure of Spring, tax matters and environmental matters, survive for longer periods. Certain of these representations, warranties, covenants and other agreements may not be accurate or complete as of a specific date because they are subject to a contractual standard of materiality that may be different from the standard generally applied under the Federal securities laws or were used for the purpose of allocating risk between Spring and Ventana rather than establishing matters as facts. Information concerning the subject matter of these representations, warranties, covenants and other agreements may have changed since the date of the Purchase Agreement, which may or may not be fully reflected in the Company’s public disclosures. Accordingly, you should not rely on these representations, warranties, covenants and other agreements as statements of fact.

The Purchase Agreement further provides that the Sellers will jointly and severally indemnify, defend and hold harmless Ventana and its affiliates from and against all damages arising out of (i) any inaccuracy of any representation or warranty of the Sellers in the Purchase Agreement, (ii) any breach of any covenant or other agreement of Sellers contained in the Purchase Agreement or related transaction documents, and/or (iii) if not covered by liability insurance, any product shipped or manufactured by, or any services provided by, Spring prior to the Closing.

Under the Purchase Agreement, Ventana has similar indemnification obligations in favor of the Sellers with respect to its representations, warranties, covenants and other agreements. Ventana also agreed to indemnify, defend and hold harmless the Sellers against certain damages arising out of any tax liabilities incurred by Ventana or Spring after the Closing. Neither the Sellers nor Ventana are obligated to indemnify the other party until the aggregate amount of indemnifiable damages equals or exceeds $75,000, after which the respective indemnifying party is only responsible for those damages that exceed

$75,000 and each of the Seller’s responsibility to indemnify Ventana under the Purchase Agreement is capped at his or her pro rata share of the Purchase Price, except with respect to matters related to taxes, fraud, title to shares and certain other matters, in which case no limits apply.

The Purchase Agreement also contains customary provisions relating to confidentiality, non-competition, non-solicitation and tax matters in light of Spring’s business and its status as an S-corporation.

The Escrow Agreement

To secure the Seller’s indemnification obligations under the Purchase Agreement (which are described above) and provide for additional payments to the Sellers upon Spring’s achievement of certain scientific milestones specified in the Purchase Agreement, Ventana deposited $11.7 million in an escrow account (the “Escrow Account”) at the Closing. The Escrow Account is to be administered pursuant to a separate Escrow Agreement (the “Escrow Agreement”), which was entered into on September 4, 2007 by Ventana, the Sellers, the Sellers’ Representatives, and the Escrow Agent.

The Escrow Agreement describes the terms and conditions on which funds may be released from the Escrow Account in respect of (i) indemnification claims, (ii) any negative working capital adjustment, (iii) receivables adjustments, (iv) milestone payments, and (v) tax withholding adjustments.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description of Exhibit
99.1	Press Release issued by Ventana Medical Systems, Inc. announcing its acquisition of Spring BioScience Corporation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

VENTANA MEDICAL SYSTEMS, INC.
By:	/s/ Lawrence L. Mehren
	Lawrence L. Mehren
	Senior Vice President, Chief Financial Officer and Secretary

Date: September 5, 2007

Exhibit Index

Exhibit No.	Description of Exhibit
99.1	Press Release issued by Ventana Medical Systems, Inc. announcing its acquisition of Spring BioScience Corporation

EX-99.1

Exhibit 99.1

VENTANA MEDICAL SYSTEMS, INC.

1910 E. Innovation Park Drive

Tucson, Arizona 85755

(520) 887-2155

VENTANA MEDICAL SYSTEMS ACQUIRES SPRING BIOSCIENCE

Leader in Tissue-Based Cancer Diagnostics to Gain Key Antibody Development Capabilities

Strengthens and Accelerates Companion Diagnostics Programs

Acquisition Expected to be Accretive to GAAP EPS in 2008

Tucson, Ariz., September 5, 2007 – Ventana Medical Systems, Inc. (NASDAQ: VMSI), the global leader in tissue-based cancer diagnostics, today announced that it has acquired Spring BioScience Corporation, an industry-leading developer and supplier of next generation rabbit monoclonal antibodies and other reagents, for $28.9 million in cash. Ventana will also pay Spring shareholders up to $11.7 million over the next two years as Spring achieves specific scientific milestones. Spring BioScience, located in Fremont, California will be operated as a wholly-owned subsidiary of Ventana.

The acquisition complements and solidifies Ventana’s ability to rapidly develop world-class diagnostic antibody reagents, required components of its advanced staining technologies and critical to its long term companion diagnostics initiatives. It will also streamline Ventana’s supply chain thereby reducing the company’s reliance on external suppliers along with adding incremental gross margin on the replacement of current advanced staining antibodies. Spring’s expertise in antibody development provides Ventana significant synergies within its SISH and Quantum Dots development programs.

The transaction is expected to be accretive to Ventana’s GAAP earnings per share, including $0.05 in 2008, and $0.09 in 2009. Ventana will also record a non-cash charge for in-process R&D and transaction related expenses in the third quarter of 2007.

Christopher Gleeson, Ventana’s President and CEO, commented, “Adding Spring’s world-class team and capabilities to Ventana represents the achievement of our goal to establish and grow resources for product development and antibody design within our organization. We now have the full range of internal capabilities to develop and distribute tissue-based cancer diagnostics to pathologists and patients around the world. In addition, because antibody development is a principle component of almost all companion diagnostics programs, the acquisition of Spring BioScience further enhances Ventana’s global leadership in the rapidly emerging area of companion diagnostics – the future of personalized medicine. Spring’s management team and employees are all highly regarded in the industry and we are looking forward to leveraging their talents and reputation for delivering superior products to build on Ventana’s track record of market-leading success.”

P&M Corporate Finance, LLC acted as financial advisor and Snell & Wilmer L.L.P. acted as legal counsel to Ventana.

ABOUT VENTANA MEDICAL SYSTEMS, INC.

Ventana develops, manufactures, and markets instrument/reagent systems that automate tissue preparation and slide staining in clinical histology and drug discovery laboratories worldwide. The Company’s clinical systems are important tools used in the diagnosis and treatment of cancer and infectious diseases. Ventana’s drug discovery systems are used to accelerate the discovery of new drug targets and evaluate the safety of new drug compounds.

SAFE HARBOR STATEMENT

This press release may contain statements that constitute ‘forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which are often characterized by the terms “may,” “believes,” “projects,” “estimate,” “expects,” or ‘anticipates,” and do not reflect historical facts. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of Ventana Medical and its subsidiaries to be materially different from those expressed or implied by such forward-looking statements. Specific forward-looking statements contained in this press release include, but are not limited to the Company’s belief that the transaction will be accretive to its earnings per share.

Factors that may affect forward-looking statements and the Company’s business generally include but are not limited to (i) risks associated with the integration of the acquired business, development, manufacturing, marketing, and sale of medical products, competitive factors, general economic conditions, legal disputes, and government actions; (ii) risk factors and cautionary statements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006; (iii) other factors or statements described in the Company’s other filings with the U.S. Securities and Exchange Commission; and (iii) other factors that the Company is currently unable to identify or quantify, but may exist in the future.

Forward-looking statements speak only as of the date on which the statement was made. Ventana does not undertake and specifically declines any obligation to update any forward-looking statements.

Visit the Ventana Medical Systems, Inc., website at www.ventanamed.com.

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