Merit Medical Closes Deal With BD for Purchase of Divestment Assets
February 15 2018 - 6:45AM
Merit Medical Systems, Inc. (NASDAQ:MMSI), a leading manufacturer
and marketer of proprietary disposable devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology, oncology, critical care and endoscopy,
announced today that it has closed the purchase of divestment
assets from BD (Becton, Dickinson and Company) in connection with
BD’s recently completed acquisition of C.R. Bard, Inc.
(Bard).
The assets acquired are soft tissue core needle
biopsy products sold under the trade names of Achieve™ Programmable
Automatic Biopsy System, Temno™ Biopsy System, Tru-Cut™ Biopsy
Needles as well as Aspira® Pleural Effusion Drainage Kits, and the
Aspira® Peritoneal Drainage System. These products will be sold by
Merit’s global direct sales force and distribution partners.
The purchase price for the product lines and
related assets was $100 million, subject to adjustment for
fluctuations in the value of transferred inventory. Merit financed
the acquisition through borrowings under its revolving credit
facility.
This transaction is expected to be accretive to
both GAAP and non-GAAP earnings in 2018, including the anticipated
impact of incremental interest expense associated with financing
the transaction. Merit’s management expects the acquisition to
provide incremental revenues on an annualized basis in the range of
$42-48 million. The transaction is also expected to expand Merit’s
operating margins and increase its cash flow. Merit’s management
expects the acquisition to provide $0.10–$0.19 in adjusted
annualized non-GAAP earnings per share accretion ($0.01 to $0.08 in
annualized GAAP earnings per share accretion).
“This transaction has been instructional and
informative as we have navigated the process to closure,” said
Merit’s Chairman and Chief Executive Officer Fred P. Lampropoulos.
“We continue to be positive about the products and opportunities as
we look forward. Transition and execution are now the keys. Our
global sales force and distribution partners are in the process of
training. Combined with our Corvocet™ Full Core Biopsy System and
our Laurane bone biopsy products, we now offer a portfolio of
products to meet our customers’ needs. We will discuss the
anticipated effects of the transaction on our 2018 operating and
financial results during our upcoming conference call on February
28th.”
ADVISORSPiper Jaffray acted as
lead financial advisor to Merit in connection with the negotiation
of the purchase agreement. Baker & McKenzie provided legal
counsel. Financing for the transaction was provided through the
lenders under its existing long-term credit facility: Wells Fargo
Bank, National Association, Bank of America, N.A., HSBC Bank USA,
National Association and U.S. Bank National Association.
ABOUT MERITFounded in 1987,
Merit Medical Systems, Inc. is engaged in the development,
manufacture and distribution of proprietary disposable medical
devices used in interventional, diagnostic and therapeutic
procedures, particularly in cardiology, radiology, oncology,
critical care and endoscopy. Merit serves client hospitals
worldwide with a domestic and international sales force totaling
approximately 290 individuals. Merit employs approximately
5,000 people worldwide with facilities in South Jordan, Utah;
Pearland, Texas; Richmond, Virginia; Malvern, Pennsylvania;
Rockland, Massachusetts; San Jose, California; Maastricht and
Venlo, The Netherlands; Paris, France; Galway, Ireland; Beijing,
China; Tijuana, Mexico; Joinville, Brazil; Markham, Ontario,
Canada; Melbourne, Australia; Tokyo, Japan; and Yishun,
Singapore.
FORWARD-LOOKING
STATEMENTSStatements contained in this release which are
not purely historical, including, without limitation, statements
regarding Merit's forecasted plans, revenues, gross margin,
operating margin, cash flow, net income, financial results or sales
efficiencies, are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 and are
subject to risks and uncertainties such as those described in
Merit's Annual Report on Form 10-K for the year ended December 31,
2016 and subsequent filings with the Securities and Exchange
Commission. Such risks and uncertainties include the
following: Merit's potential inability to successfully manage and
integrate the completed acquisition and achieve anticipated
financial results, facilities utilization and other benefits;
uncertainties as to whether Merit will achieve sales, gross margin,
cash flow and profitability results from the acquired assets which
are comparable to the experience of BD and Bard; unknown costs and
risks associated with the acquired assets; governmental scrutiny
and regulation of the medical device industry, including
governmental inquiries, investigations and proceedings involving
Merit or the acquired assets; how the occurrence of any
unanticipated event or cost in connection with the completed
transaction may affect Merit’s projected ability to comply with
debt covenants; infringement of acquired technology or the
assertion that acquired technology infringes the rights of other
parties; the potential of fines, penalties or other adverse
consequences if Merit's employees or agents violate the U.S.
Foreign Corrupt Practices Act or other laws or regulations; laws
and regulations targeting fraud and abuse in the healthcare
industry; potential for significant adverse changes in governing
regulations; changes in tax laws and regulations in the United
States or other countries; increases in the prices of commodity
components; negative changes in economic and industry conditions in
the United States or other countries; termination or interruption
of relationships with Merit's suppliers, or failure of such
suppliers to perform, in each case including acquired supplier
relationships; the effects of fluctuations in exchange rates on
projected financial results; development of new products and
technology that could render Merit's existing or acquired products
obsolete; changes in healthcare policies or markets related to
healthcare reform initiatives; failure to comply with applicable
environmental laws; changes in key personnel; work stoppage or
transportation risks; price and product competition; availability
of labor and materials; fluctuations in and obsolescence of
inventory; and other factors referred to in Merit's Annual Report
on Form 10-K for the year ended December 31, 2016 and other
materials filed with the Securities and Exchange Commission. All
subsequent forward-looking statements attributable to Merit or
persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. Actual results will likely
differ, and may differ materially, from anticipated results.
Financial estimates are subject to change and are not intended to
be relied upon as predictions of future operating results, and
Merit assumes no obligation to update or disclose revisions to
those estimates.
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Contact:
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Anne-Marie Wright, Vice
President, Corporate Communications |
Phone: |
(801) 208-4167
e-mail: awright@merit.com Fax: (801) 253-1688 |
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