Advanced Medical Optics to Acquire VISX, Creating Comprehensive
Global Ophthalmic Medical Device Company Transaction Values VISX at
$1.27 Billion SANTA ANA, Calif. and SANTA CLARA, Calif., Nov. 9
/PRNewswire-FirstCall/ -- Advanced Medical Optics, Inc. (AMO)
(NYSE:AVO), a global leader in ophthalmic surgical devices and eye
care products, and VISX, Incorporated (NYSE:EYE), the global leader
in laser vision correction, today announced the acquisition of VISX
by AMO. The strategic combination, which was unanimously approved
by both company's boards, will bring together two highly
complementary companies with a broad range of superior technologies
and a singular focus on serving the vision care needs of
practitioners and patients around the world. Under the terms of the
definitive merger agreement, VISX stockholders will receive 0.552
shares of AMO stock and $3.50 in cash for every share of VISX
common stock they own, or a total value of $26.52 per share of VISX
common stock, based on the closing price of AMO's common stock on
November 8, 2004. The total consideration will be approximately
29.0 million shares of AMO stock and $184 million in cash. AMO
expects the exchange of shares to be tax-free to VISX stockholders.
Upon completion of the transaction, AMO's stockholders will own
approximately 58.5 percent of the combined company and VISX's
stockholders will own approximately 41.5 percent. The combination
of AMO and VISX provides numerous strategic and financial benefits,
including: * Creates the world's leading refractive surgical
business focused on fast-growing segments of the ophthalmic medical
device market. * Provides surgeons and patients with a
comprehensive portfolio of leading technologies, including some of
the market's most visible brands such as VISX's STAR(TM) Laser
System and CustomVue(TM) custom ablation technology, and AMO's
AmadeusTM microkeratome, VerisyseTM phakic IOL, and ReZoom(R),
Array(R) and Tecnis(R) multifocal IOL. * Creates a $1 billion
global enterprise with a strong track record of growth, higher
operating margins and increased free cash flow, and broad exposure
to growing, global ophthalmic device markets. * Fortifies the
company's commitment to innovation through combined R&D
expertise and technical competencies. * Provides substantial cost
synergies and operating efficiencies by building upon the size and
scope of the combined organization's infrastructure, distribution
network, service capability and manufacturing expertise. * Improves
the company's financial flexibility and deleverages the balance
sheet, allowing for continued investment in the future. "AMO and
VISX represent an exciting combination of talent, technology,
customer knowledge and growth potential," said Jim Mazzo, AMO
president and chief executive officer. "With its proprietary laser
systems and custom ablation technologies, skilled service
organization and long-standing reputation for reliability, VISX is
the manufacturer of choice in laser vision correction. Adding their
robust product platform to our existing refractive business
represents a bold step forward to achieve one of AMO's core
strategic goals to build a leading refractive surgical business.
Joining forces will enable us to better serve practitioners and
patients with a full range of surgical technologies while
continuing to deliver improving returns to shareholders." "This
merger is a compelling strategic, financial and cultural fit," said
Liz Davila, VISX chairman and chief executive officer. "Our two
organizations share a rich heritage of innovation, a commitment to
exceptional customer service and a track record of creating value
for shareholders. By taking advantage of AMO's global distribution
network, we can expand our laser vision correction business into
new markets. At the same time, we can enhance surgeon understanding
and adoption of AMO's new refractive IOL technologies. The result
will be an expanded opportunity to give ophthalmic surgeons an
increasingly broad set of options for treating myopia, hyperopia
and presbyopia." The combined company will retain the Advanced
Medical Optics name and be headquartered in Santa Ana, CA. Upon
close of the transaction, Ms. Davila will join AMO's board of
directors, increasing to eight the number of directors for the
combined company. Following completion of the transaction, Doug
Post, VISX president and chief operating officer will become
president of AMO's Americas region, joining the existing AMO
officers, who will continue to serve in their current management
positions. "In less than two-and-a-half years since our spin-off,
AMO has made remarkable progress to strengthen our core businesses,
improve global efficiency and create a platform for sustained
growth," said Richard A. Meier, executive vice president of
operations and finance and chief financial officer. "We have
accomplished this by executing against a clearly defined strategic
plan, including our reorganization under a centralized operating
model, and the acquisition and rapid integration of the Pfizer
surgical ophthalmic business earlier this year. The acquisition of
VISX builds on this strong foundation and, together with the
benefits of our Pfizer acquisition and our improved operating
model, we expect the transaction will be neutral to earnings in
2005 and to be meaningfully accretive to our pro forma earnings per
share in 2006 and beyond." Assuming closing of the transaction in
the first quarter of 2005, AMO expects to realize cost synergies of
$10 million to $15 million in 2005, resulting principally from
eliminating certain redundant G&A expenses and leveraging
VISX's equipment manufacturing operations. In addition, AMO expects
modest revenue synergies in 2005. AMO expects these opportunities
to grow in future years as it fully integrates VISX and capitalizes
on each company's strong products, brands, technologies and teams,
and leverages further the complementary markets that each company
addresses today. Based on this, AMO expects the transaction to be
neutral to its 2005 pro forma earnings per share guidance of $1.65
to $1.75, excluding transaction-related costs. AMO expects to
achieve 2006 pro forma earnings per share of $2.20 to $2.30. Upon
closing, AMO expects to provide more detailed guidance regarding
certain transactional costs. The transaction requires the approval
of both AMO and VISX stockholders, and is subject to clearance
under the Hart-Scott-Rodino Antitrust Improvement Act, as well as
other customary closing conditions. Morgan Stanley & Co.
Incorporated acted as exclusive financial advisor and Skadden,
Arps, Slate, Meagher and Flom LLP acted as legal advisor to AMO in
this transaction. AMO has received a commitment from Morgan Stanley
to provide for the cash consideration of the transaction. Goldman,
Sachs & Co. acted as exclusive financial advisor and Wilson
Sonsini Goodrich & Rosati acted as legal advisor to VISX. Live
Webcast and Replay AMO and VISX will host a live Webcast to discuss
the acquisition announcement at 5:45 p.m. EST today. To
participate, please visit the Investors/Media section of AMO's
corporate website at http://www.amo-inc.com/ or the Investor
Relations section of the VISX, Incorporated website at
http://www.visx.com/. The Webcast will be archived and accessible
through midnight EST on Tuesday, November 23, 2004 by visiting
http://www.amo-inc.com/ or http://www.visx.com/. Additional
Information and Where You Can Find It AMO intends to file with the
SEC a Registration Statement on Form S-4, which will include a
joint proxy statement/prospectus of VISX and AMO and other relevant
materials in connection with the proposed transaction. The joint
proxy statement/prospectus will be mailed to the stockholders of
VISX and AMO. Investors and security holders of VISX and AMO are
urged to read the joint proxy statement/prospectus and the other
relevant materials when they become available because they will
contain important information about VISX, AMO and the proposed
transaction. The joint proxy statement/prospectus and other
relevant materials (when they become available), and any other
documents filed by VISX or AMO with the SEC, may be obtained free
of charge at the SEC's web site at http://www.sec.gov/. In
addition, investors and security holders may obtain free copies of
the documents filed with the SEC by VISX by contacting VISX
Investor Relations at or via telephone at (408) 773-7600. Investors
and security holders may obtain free copies of the documents filed
with the SEC by AMO at http://www.amo-inc.com/ or via telephone at
(714) 247-8348. Investors and security holders are urged to read
the joint proxy statement/prospectus and the other relevant
materials when they become available before making any voting or
investment decision with respect to the proposed transaction. AMO
and its respective directors and executive officers may be deemed
to be participants in the solicitation of proxies from the
stockholders of VISX and AMO in favor of the proposed transaction.
Information about the directors and executive officers of AMO and
their respective interests in the proposed transaction will be
available in the joint proxy statement/prospectus. VISX and its
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders
of AMO and VISX in favor of the proposed transaction. Information
about the directors and executive officers of VISX and their
respective interests in the proposed transaction will be available
in the joint proxy statement/prospectus. Pro Forma Guidance AMO's
guidance for 2005 and 2006 earnings per share is provided on a pro
forma basis, which excludes unrealized gains or losses on
derivative instruments due to the unpredictability of foreign
currency fluctuations and future one-time costs associated with the
Pfizer acquisition and this transaction. AMO does not provide a
reconciliation of projected pro forma earnings per share to
expected reported results due to the unknown effect and potential
significance of foreign currency fluctuations on the fair value of
its currency derivatives and unknown transaction costs. The
company's management uses pro forma financials to measure and
compare its regional and global performance absent the impact of
these items on currency derivatives, acquisition-related charges,
debt extinguishment costs and other costs associated with the
recapitalization. Additionally, management believes this format is
useful for investors to perform more meaningful comparisons of
operating results. About Advanced Medical Optics Advanced Medical
Optics, Inc. (AMO) is a global leader in the development,
manufacturing and marketing of ophthalmic surgical and contact lens
care products. The company focuses on developing a broad suite of
innovative technologies and devices to address a wide range of eye
disorders. Products in the ophthalmic surgical line include
foldable intraocular lenses, phacoemulsification systems,
viscoelastics and related products used in cataract and refractive
surgery, and microkeratomes used in LASIK procedures for refractive
error correction. AMO owns or has the rights to such well-known
ophthalmic surgical product brands as Phacoflex(R), Clariflex(R),
Array(R), Sensar(R), Tecnis(R), CeeOn(R) and Verisyse(R)
intraocular lenses, the Sovereign(R) and Sovereign(R) Compact(TM)
phacoemulsification systems with WhiteStar(TM) technology, the
Healon(R) family of viscoelastics, the Baerveldt(R) glaucoma shunt
and the Amadeus(TM) microkeratome. Products in the contact lens
care line include disinfecting solutions, daily cleaners, enzymatic
cleaners and lens rewetting drops. Among the well-known contact
lens care product brands the company possesses are COMPLETE(R),
COMPLETE(R) Blink-N-Clean(R), COMPLETE(R) Moisture PLUS(TM),
Consept(R)F, Consept(R) 1 Step, Oxysept(R) 1 Step, UltraCare(R),
Ultrazyme(R), Total Care(R) and blink(TM) branded products. Amadeus
is a licensed product of, and a trademark of SIS, Ltd. Advanced
Medical Optics, Inc. is based in Santa Ana, California, and employs
approximately 2,800 worldwide. The company has direct operations in
about 20 countries and markets products in approximately 60
countries. For more information, visit http://www.amo-inc.com/.
About VISX Incorporated VISX is a worldwide market leader in the
design, manufacture, and sale of laser vision correction systems.
The Company was founded in 1988 and received FDA approval for its
first laser vision correction product in 1996. VISX holds over 200
patents worldwide and has licensed its technology to Alcon, Bausch
& Lomb, LaserSight, Nidek, Schwind, Zeiss-Meditec, and
WaveLight Technologies. VISX recently introduced the CustomVue(TM)
procedure, a significant advancement in laser vision correction
that enables customized corrections based on a comprehensive
diagnostic measurement of the optical errors in the eye. Clinical
trial results show that the CustomVue(TM) procedure has the
potential to improve vision beyond the correction possible with
contacts and glasses. In the United States alone there are 50 to 60
million eligible laser vision correction candidates who experience
some form of nearsightedness, farsightedness, or astigmatism. VISX
has a current effort underway to treat presbyopia, the condition
that requires reading glasses with age, due to loss of
accommodation for close work. Additional information on VISX can be
found on the worldwide web at http://www.visx.com/. Cautionary
Statement Regarding Forward-Looking Statements Statements contained
in this document that refer to AMO's estimated or future results
such as statements regarding the timing and certainty of closing
the transaction, estimated share ownership percentages, strategic
and financial benefits of the merger, statements of Jim Mazzo, Liz
Davila and Richard Meier, statements regarding director and officer
positions, expectations regarding accretion, integration and cost
savings, and financial guidance are forward-looking statements
within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
based on management's current expectations and beliefs and are
subject to a number of factors and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. The forward-looking statements
contained in this document include statements about future
financial and operating results and the proposed VISX/AMO
transaction. These statements are not guarantees of future
performance, involve certain risks, uncertainties and assumptions
that are difficult to predict, and are based upon assumptions as to
future events that may not prove accurate. Therefore, actual
outcomes and results may differ materially from what is expressed
herein. For example, if either of the companies does not receive
required stockholder approvals or fails to satisfy other conditions
to closing, the transaction will not be consummated. In any
forward-looking statement in which AMO or VISX expresses an
expectation or belief as to future results, such expectation or
belief is expressed in good faith and believed to have a reasonable
basis, but there can be no assurance that the statement or
expectation or belief will result or be achieved or accomplished.
The following factors, among others, could cause actual results to
differ materially from those described in the forward-looking
statements: risks associated with uncertainty as to whether the
transaction will be completed, successfully integrating AMO and
VISX, the failure to realize the synergies and other perceived
advantages resulting from the merger, costs and potential
litigation associated with the merger, the failure to obtain the
approval of each company's stockholders, the inability to obtain,
or meet conditions imposed for, applicable regulatory and tax
requirements relating to the merger, the failure of either party to
meet the closing conditions set forth in the definitive agreement,
the ability to retain key personnel both before and after the
merger, each company's ability to successfully execute its business
strategies, the extent and timing of regulatory approvals, and the
extent and timing of market acceptance, of new products or product
indications, manufacturing, litigation, the procurement,
maintenance, enforcement and defense of patents and proprietary
rights, competitive conditions in the industry, business cycles
affecting the markets in which any products may be sold,
fluctuations in foreign exchange rates and interest rates, and
economic conditions generally or in various geographic areas,
including those set forth in AMO's and VISX's most recent Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q, especially
in the "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections, and their
respective Current Reports on Form 8-K and other SEC filings. AMO
is under no obligation to (and expressly disclaims any such
obligation to) update or alter its forward-looking statements
whether as a result of new information, future events, or
otherwise. For further information, please contact: investors,
Sheree Aronson, +1-714-247-8290, , or media, Steve Chesterman,
+1-714-247-8711, , both of Advanced Medical Optics; or
investors/media, Jackie Cossmon of Visx Incorporated,
+1-408-773-7435, . DATASOURCE: Advanced Medical Optics, Inc.
CONTACT: investors, Sheree Aronson, +1-714-247-8290, , or media,
Steve Chesterman, +1-714-247-8711, , both of Advanced Medical
Optics; or investors/media, Jackie Cossmon of Visx Incorporated,
+1-408-773-7435, Web site: http://www.visx.com/ Web site:
http://www.amo-inc.com/
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