Kyphon Closes Acquisition of St. Francis Medical Technologies
January 18 2007 - 6:00PM
PR Newswire (US)
SUNNYVALE, Calif., Jan. 18 /PRNewswire-FirstCall/ -- Kyphon Inc.
(NASDAQ:KYPH) today announced that it has closed the acquisition of
St. Francis Medical Technologies, Inc. ("St. Francis"), a privately
held, California-based company that manufactures the X-STOP(R)
Interspinous Process Decompression (IPD(R)) System, the first
FDA-approved interspinous process device for treating lumbar spinal
stenosis. The transaction broadens Kyphon's focus in minimally
invasive spine by adding the X-STOP(R) technology platform to its
existing KyphX(R) balloon kyphoplasty technologies for repairing
vertebral compression fractures and its recently launched
Functional Anaesthetic Discography(TM) procedure for diagnosing the
source of low back pain. "The acquisition of St. Francis is a key
element in executing our strategy and advancing our mission to
become the recognized global leader in restoring spinal function
through minimally invasive therapies," said Richard Mott, Kyphon's
president and chief executive officer. "We believe this is an
excellent strategic fit for Kyphon and further expands our
innovative treatments for the aging spine to include less invasive
treatment of lumbar spinal stenosis." Kyphon acquired 100% of the
fully diluted equity of St. Francis for $525 million in cash at
closing, and additional revenue-based contingent payments of up to
$200 million payable in either cash or a combination of cash and
stock, at Kyphon's election. Kyphon financed the transaction
through a combination of cash on hand and bank financing, including
a $425 million syndicated term loan and $200 - $300 million credit
facility, arranged and led by Bank of America N.A. Kyphon
previously announced that it had signed a definitive agreement to
acquire St. Francis on December 4, 2006. A further update on the
St. Francis acquisition will be provided during Kyphon's fourth
quarter 2006 earnings call, which is presently scheduled for
Tuesday, January 30, 2007 at 2:00 p.m. Pacific Time. Interested
parties may access the call by dialing 1-800-289-0533 (U.S.) or
913-981-5525 (International). A live webcast of the call will also
be available from the Investor Relations section of the company's
corporate Web site at http://www.kyphon.com/. The call will be
archived on this site for a minimum of two months. An audio replay
of the call will be available beginning from 6:00 p.m. Pacific Time
on Tuesday, January 30, 2007, until 12:00 a.m. Pacific Time on
Tuesday, February 20, 2007. To access the replay, dial 888-203-1112
(U.S.) or 719-457-0820 (International) and enter the access code
8484841. About Kyphon Inc. Kyphon develops and markets medical
devices designed to restore and preserve spinal function and
diagnose low back pain using minimally invasive technologies. The
company's products are used in balloon kyphoplasty for the
treatment of spinal fractures caused by osteoporosis or cancer, in
the Functional Anaesthetic Discography(TM) procedure for diagnosing
the source of low back pain, and in the Interspinous Process
Decompression(R) procedure for treating lumbar spinal stenosis.
More information about the company and its products can be found at
http://www.kyphon.com/ and its patient education Web site,
http://www.spinalfracture.com/. NOTE: Functional Anaesthetic
Discography is a trademark, and Kyphon, KyphX, X-STOP, X STOP, and
IPD are registered trademarks of Kyphon Inc. This press release
contains forward-looking statements within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. Forward looking
statements include, but are not limited to, those that use words
such as "believes," "may," and words of similar effect, and
specifically include the company's anticipated business direction
and performance. Forward-looking statements are based on
management's current preliminary expectations without taking into
account any possible impact from any other future business
development transaction and are subject to risks, uncertainties and
assumptions, which may cause the company's actual results to differ
materially from the statements contained herein. Material factors
that may cause results to differ from the statements made include
the significant amount of debt incurred in connection with the
transaction, including the restrictions that debt covenants will
impose on its future operations, the risk that Kyphon may default
on repayment of the debt, and the risk that Kyphon may not be able
to refinance that debt on favorable terms; failure to achieve the
revenues, cost savings, growth prospects and any or other synergies
expected from the proposed transaction; the combined company may
require additional capital and may not be able to raise sufficient
capital, on favorable terms or at all; delays and challenges
associated with integrating the companies; and risks associated
with completion of our pending acquisitions of the spinal assets of
Disc-O-Tech, including the risk that either or both of those
acquisitions may be delayed or not completed for regulatory or
other reasons, or may be completed subject to onerous regulatory
conditions. Other information on potential risk factors that could
affect Kyphon, its business and its financial results are detailed
in the company's periodic filings with the Securities and Exchange
Commission (SEC), including, but not limited to, those risks and
uncertainties listed in the section entitled "Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Factors Affecting Future Operating Results," which can
be found in Kyphon's annual report on Form 10-K for the year ended
December 31, 2005 filed with the SEC on March 3, 2006 and in
Kyphon's quarterly report on Form 10-Q for the quarter ended
September 30, 2006 filed with the SEC on November 9, 2006. Kyphon
undertakes no obligation to release publicly any revisions to any
forward-looking statements contained herein to reflect events or
circumstances after the date hereof. KYPHG DATASOURCE: Kyphon Inc.
CONTACT: Julie D. Tracy, Vice President, Investor Relations and
Corporate Marketing of Kyphon Inc., +1-408-548-6687, or Web site:
http://www.kyphon.com/
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