Brady Corporation (NYSE:BRC) (“Brady”), a world leader in
identification solutions, announced today that it has acquired
Precision Dynamics Corporation (“PDC”) from Water Street Healthcare
Partners, a strategic private equity firm focused exclusively on
the health care industry, in a cash transaction for $300 million,
subject to customary working capital and post-close adjustments.
PDC, with annual sales of approximately $173 million, is a leader
in identification products primarily for the healthcare market,
specializing in patient wristbands, specialty labels and
identification systems used in hospitals to reduce medical errors
and integrate and share patient data.
PDC, founded in 1956, is based in Valencia, Cal., and employs
approximately 1,000 people globally. The company has manufacturing
facilities in Tijuana, Mexico and Port Orange, Fla., and a European
sales office with light manufacturing in Nivelles, Belgium.
PDC’s healthcare wristband and label systems are used by most
U.S. hospitals and reach every touch point in the delivery of
patient care, from admissions to discharge. PDC’s products also
meet important patient safety guidelines of The Joint Commission,
FDA, AHA, and HIPAA. In addition to its primary focus on healthcare
identification, PDC also offers wristband products for the leisure
and entertainment industries and for crowd control and law
enforcement utilizing technologies including RFID, holograms and
barcodes. PDC products are sold through a direct sales force,
distributors and system integrators.
“The acquisition of PDC, a leader in the U.S. healthcare
identification space, provides an important anchor position for
Brady in the attractive healthcare market and fits well with our
mission to identify and protect premises, products and people, and
our vision to be the market leader in all of our businesses,” said
Brady President and Chief Executive Officer Frank M. Jaehnert.
“PDC’s highly regarded management team comes with deep experience
in the healthcare identification space and has been very successful
in building PDC into the strong business that it is today. PDC’s
large customer base, strong channels to market and broad product
offering together with Brady’s laboratory and people identification
products, deep materials and printer expertise, and global
footprint, make this a very attractive business combination and
provide a strong foundation to build upon PDC’s market leading
position.”
Curt Selquist, an operating partner with Water Street and
chairman of PDC stated, “Over the last five years, we expanded and
enhanced PDC’s product development and manufacturing capabilities,
and significantly broadened its portfolio of identification
products through strategic acquisitions. The sale of PDC to such a
highly regarded market leader in identification solutions fulfills
our mission of having PDC end up with a company that continues this
mission of long-term profitable growth.”
Excluding one-time acquisition-related costs, Brady expects this
acquisition to be slightly accretive to earnings per diluted share
for the remainder of fiscal 2013, and $0.10 to $0.15 accretive to
earnings per diluted share in the first full fiscal year. The
non-recurring acquisition-related costs are expected to include a
one-time, non-cash tax charge of $25 to $30 million related to the
repatriation of cash to the U.S. in financing this acquisition and
$8 to $12 million of other acquisition-related expenses.
Brady will hold a conference call to discuss this announcement
at 7:30 a.m. Central Time on December 31, 2012. Interested parties
can listen to the live Web cast by logging on to
www.bradycorp.com.
Brady Corporation is an international manufacturer and marketer
of complete solutions that identify and protect premises, products
and people. Its products help customers increase safety, security,
productivity and performance and include high-performance labels
and signs, safety devices, printing systems and software, and
precision die-cut materials. Founded in 1914, the company has more
than 1 million customers in electronics, telecommunications,
manufacturing, electrical, construction, , medical and a variety of
other industries. Brady is headquartered in Milwaukee and as of
July 31, 2012, employed approximately 6,900 people at operations in
the Americas, EMEA and Asia-Pacific. Brady’s fiscal 2012 sales were
approximately $1.32 billion. Brady stock trades on the New York
Stock Exchange under the symbol BRC. More information is available
on the Internet at www.bradycorp.com or www.pdcorp.com.
Brady believes that certain statements in this news release are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements related to
future, not past, events included in this news release, including,
without limitation, statements regarding Brady’s future financial
position, business strategy, targets, projected sales, costs,
earnings, capital expenditures, debt levels and cash flows, and
plans and objectives of management for future operations are
forward-looking statements. When used in this news release, words
such as “may,” “will,” “expect,” “intend,” “estimate,”
“anticipate,” “believe,” “should,” “project” or “plan” or similar
terminology are generally intended to identify forward-looking
statements. These forward-looking statements by their nature
address matters that are, to different degrees, uncertain and are
subject to risks, assumptions and other factors, some of which are
beyond Brady’s control, that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. For Brady, uncertainties arise from the length or
severity of the current worldwide economic downturn or timing or
strength of a subsequent recovery; future financial performance of
major markets Brady serves, which include, without limitation,
telecommunications, manufacturing, electrical, construction,
laboratory, education, governmental, public utility, computer,
transportation; difficulties in making and integrating
acquisitions; risks associated with newly acquired businesses;
Brady’s ability to develop and successfully market new products;
changes in the supply of, or price for, parts and components;
increased price pressure from suppliers and customers; fluctuations
in currency rates versus the US dollar; unforeseen tax
consequences; potential write-offs of Brady’s substantial
intangible assets; Brady’s ability to retain significant contracts
and customers; risks associated with international operations;
Brady’s ability to attract and retain key talent; Brady’s ability
to maintain compliance with its debt covenants; technology changes;
business interruptions due to implementing business systems;
environmental, health and safety compliance costs and liabilities;
future competition; interruptions to sources of supply; Brady’s
ability to realize cost savings from operating initiatives;
difficulties associated with exports; risks associated with
restructuring plans; risks associated with obtaining governmental
approvals and maintaining regulatory compliance for new and
existing products; and numerous other matters of national, regional
and global scale, including those of a political, economic,
business, competitive and regulatory nature contained from time to
time in Brady’s U.S. Securities and Exchange Commission filings,
including, but not limited to, those factors listed in the “Risk
Factors” section located in Item 1A of Part I of Brady’s Form 10-K
for the year ended July 31, 2012. These uncertainties may cause
Brady’s actual future results to be materially different than those
expressed in its forward-looking statements. Brady does not
undertake to update its forward-looking statements.
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