Midas Inc. (MDS) News

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   Important Milestone in Executing Global Life Sciences Strategy
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TORONTO, Oct. 5 /CNW/ - MDS Inc. (TSX:MDS; NYSE: MDZ), a global life
sciences company, announced today a new chapter in the Company's history as it
signed an agreement to sell its Canadian laboratory services business,
MDS Diagnostic Services, to Borealis Infrastructure Management Inc. in a
CAD $1.325 billion transaction. This strategic sale is designed to shift the
company's business focus to the life sciences market.
Under this agreement, Borealis Infrastructure Management, an investment
entity of Ontario Municipal Employees Retirement System (OMERS), one of
Canada's largest pension plans, will acquire MDS Diagnostic Services, Canada's
largest provider of laboratory services, with annualized revenues of
CAD$335 million and over 2,900 employees.
This sale is pivotal to the strategy that MDS has been executing since
last September. This strategy also included streamlining its cost structure to
be more competitive and selling non strategic assets.
"The sale of our diagnostics business represents a major milestone for
MDS in the transition to a global life sciences company," said Stephen P.
DeFalco, President and Chief Executive Officer, MDS Inc. "We will be able to
focus exclusively on life sciences markets, where incredible advances are
being made to diagnose and treat diseases. This agreement represents a great
outcome for our shareholders, our employees and the customers we serve."
"We see an exciting future for this business," said Michael Rolland,
Senior Vice President of Borealis Infrastructure. "We look forward to working
with the talented professional staff at MDS Diagnostic Services to ensure that
they continue to lead the industry in the delivery of laboratory services that
support the healthcare needs of Canadians."
From the total transaction price of CAD$1.325 billion, MDS expects to
realize net proceeds of approximately CAD$1.052 billion, after provision for
taxes, expenses and amounts attributable to minority interests. A portion of
the purchase price may be retained for up to 18 months, contingent on the
satisfaction of specific transition obligations of MDS. This transaction is
subject to conditions and customary approvals, including regulatory consents
and approval from the shareholders of LPBP Inc., the limited partner of the
entity that owns the assets used in the Ontario Laboratory Business. The
transaction is expected to close by the end of January 2007.
MDS has been advised by RBC Capital Markets and UBS Securities on this
transaction.
Following the completion of this transaction, MDS intends to make a
number of changes to its capital structure. MDS plans to use CAD$500 million
of the proceeds to fund a one-time share buyback, subject to regulatory
approval. In keeping with the practices of its life sciences peers, MDS will
discontinue the payment of its quarterly dividend. In addition, MDS intends to
invest the remainder of the proceeds in growing its market-leading life
sciences businesses. The company also expects to convert to US$ reporting in
the first quarter of 2007 and to US GAAP reporting over the course of fiscal
2007.
MDS has market-leading franchises in drug discovery instruments,
molecular imaging, radiopharmaceutics and contract research services for
pharmaceutical and biotech clients. These businesses provide products and
services to enable the development of new drugs and diagnostics as well as the
diagnosis and treatment of disease.
As a company with US$1 billion in life sciences revenues, following this
transaction MDS expects to generate 95 percent of its revenues from global
markets by the end of this fiscal year. The strengthened focus on life
sciences should enable the company to generate higher growth rates in the
markets in which the company's three business units operate. For example:

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-   MDS Sciex, a leading provider of analytical instruments, operates in
    a market with an 8% - 11% growth rate annually.
-   MDS Nordion, a leading provider of medical isotopes and leading
    developer and manufacturer of radiotherapeutics, does business in a
    market with a 5% - 8% annual growth rate.
-   MDS Pharma Services, a leading provider of early stage drug
    development services and the 6th largest global contract research
    organization, operates in a market with a 10% - 14% annual growth
    rate.
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An analyst and institutional investor conference call will be held at
10 am EST this morning, October 5th, to discuss this announcement. The call
will be webcast live at www.mdsinc.com. A recording of the conference call
will be available at www.mdsinc.com/news_events/webcasts_presentations.asp or
by calling 416-695-5800 and entering access code 3196593.

This press release contains forward-looking statements (within the
meaning of applicable securities' legislation including the U.S. Private
Securities Litigation Reform Act of 1995) relating to the proposed sale by MDS
of its diagnostic business, the intended use of proceeds, such as share
buybacks and the cessation of dividends by MDS following the completion of the
transaction and the ability of MDS to generate future growth. Words such as
"expects", "will", "should", "plans" and "intends" are intended to identify
these forward-looking statements. These forward-looking statements are based
on estimates and assumptions made by MDS in light of its experience and its
perception of historical trends, current conditions and expected future
developments, as well as other factors that MDS believes are appropriate in
the circumstances. There are a number of risks, uncertainties and other
factors that could cause (i) the proposed sale not to occur or not to occur
within the expected period; (ii) MDS to use the proceeds in a different manner
than expected; (iii) MDS to not execute a share buyback or continue paying
quarterly dividends or (iv) future growth rates in the Company's remaining
businesses to be adversely affected or to be less than historical growth
rates. These factors include, without limitation, MDS's ability to obtain the
requisite regulatory and other approvals and to comply with the closing
conditions to the transaction, some of which are beyond MDS's control; changes
in market economic or regulatory conditions or liquidity needs that make it
inadvisable or impractical to conduct a share buyback or change dividend
policies or that adversely impact future growth rates; many of which are
beyond MDS's control. Risk factors relating to MDS's business, as discussed in
greater detail in the "Risk Factors" section of MDS's Annual Information Form
or in its Management Discussion and Analysis included in its Annual Report on
Form 40-F (copies of which filings may be obtained at www.sedar.com or
www.sec.gov) should be considered carefully, and readers should not place
undue reliance on MDS's forward-looking statements. MDS has no intention and
undertakes no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

About MDS Inc.

MDS Inc. (TSX: MDS; NYSE: MDZ) is a global life sciences company that
provides market-leading products and services that our customers need for the
development of drugs and diagnosis and treatment of disease. We are a leading
global provider of pharmaceutical contract research, medical isotopes for
molecular imaging, radiotherapeutics, and analytical instruments. MDS has more
than 8,800 highly skilled people in 28 countries. Find out more at
www.mdsinc.com or by calling 1-888-MDS-7222, 24 hours a day. MDS Diagnostic
Services, a business unit of MDS Inc. (TSX: MDS, NYSE: MDZ), is a leading
provider of laboratory testing and management services.

About Borealis Infrastructure Management Inc.

Borealis Infrastructure identifies, invests in and manages OMERS
infrastructure assets, which provide competitive and stable rates of return
over a long investment horizon. In the business since 1998, Borealis is a
global leader in infrastructure investing, with assets in energy,
transportation, infrastructure buildings, including long-term care facilities
and hospitals, pipelines and telecommunications. Visit the Borealis
Infrastructure website at www.borealisinfrastructure.com for more information.

OMERS is one of Canada's largest pension plans, with more than
$41 billion in assets. It provides retirement benefits to 365,000 members on
behalf of 900 local government employers across Ontario. Visit the OMERS
website at www.omers.com for more information.