Cantel Medical Acquires Crosstex International; Extending its Infection Prevention and Control Strategy into the Dental Arena
August 03 2005 - 11:51AM
Business Wire
CANTEL MEDICAL CORP. (NYSE: CMN), as part of its strategic plan to
expand its infection prevention and control business, has acquired
Crosstex International, Inc., a leading manufacturer and reseller
of single-use infection control products used broadly in the
healthcare arena, principally in the dental market. As a result of
the acquisition, Crosstex became a wholly-owned subsidiary of
Cantel on August 1, 2005. For its fiscal year ended April 30, 2005,
Crosstex reported revenues of approximately $47.4 million and
pre-tax income of $6.3 million. After adjusting for the
shareholders' non-recurring compensation, pre-tax income would be
$9.0 million. The acquisition is expected to be mildly accretive in
Cantel's 2006 fiscal year with more significant accretion in fiscal
2007. The purchase price, which is subject to adjustment for the
net asset value at July 31, 2005, was $74.2 million, comprised of
$67.4 million in cash and 384,821 shares of Cantel stock (valued at
$6.8 million). In addition there is a further $12.0 million
potential earnout payable to the sellers of Crosstex over three
years based on operating results. Each of the three principal
executives of Crosstex, Richard Allen Orofino, President, and
Executive Vice Presidents, Gary Steinberg and Mitchell Steinberg,
has entered into a three-year employment agreement. Crosstex, a
privately-owned company founded in 1953, has its headquarters and
major manufacturing operations in Hauppauge, New York, with other
manufacturing and distribution facilities in Pennsylvania,
California and Georgia. Sold throughout the world, Crosstex branded
and private label products include patient towels and bibs,
sterilization pouches and accessories, face masks, eyewear,
disinfectants and deodorizers, germicidal wipes, hand care
products, gloves, sponges, cotton products, needles and syringes,
scalpels and blades, containers, saliva evacuators and ejectors.
For further information, visit the Crosstex web site at
www.crosstex.com. Mr. James P. Reilly, President and Chief
Executive Officer of Cantel, stated, "We continue to pursue our
strategy of acquiring branded niche leaders and expanding in the
burgeoning area of infection prevention and control. Within the
dental industry, the Crosstex brand name has long been recognized
as a leader for innovative products and outstanding service. Demand
for Crosstex products continues to rise with the growth in
preventative and cosmetic dental procedures, increased public
awareness and expanded industry guidelines for protective clothing,
face masks, gloves, and sterilization equipment. With the
termination of our Canadian distribution agreements with Olympus
next year, Crosstex will not only accelerate our transformation
into a pure-play infection prevention and control company, but will
provide us with a significant platform upon which to build. Given
its sterling reputation, seasoned management, and quality branded
products, we are delighted to add Crosstex to the Cantel family."
Mr. Richard Allen Orofino, President of Crosstex, commented, "We
have built Crosstex over the past fifty years as a family business
and we expect to continue growing with our proven formula for
success. However, with so many opportunities in our sights, we
believe Cantel is the perfect partner to aid us in accelerating our
growth plans. There is a wonderful cultural fit between our
companies and we are excited to take Crosstex to the next level in
our partnership with Cantel." Cantel Medical Corp., a healthcare
company, is a leading provider of infection prevention and control
products, which include specialized medical device reprocessing
systems for renal dialysis and endoscopy, water treatment systems,
sterilants, diagnostic imaging and therapeutic medical equipment
primarily focused on endoscopy, hollow fiber membrane filtration
and separation technologies for medical and non-medical
applications, and specialized packaging for infectious and
biological specimens. Cantel also sells scientific instrumentation
products and provides technical maintenance services for its
products. For further information, visit the Cantel web site at
www.cantelmedical.com. Cantel will hold a conference call to
discuss the acquisition on Wednesday, August 3, 2005 at 4:00 p.m.
Eastern Time. Participants on the call will include Charles M.
Diker, Chairman; James P. Reilly, President and CEO; Andrew A.
Krakauer, Executive Vice President and COO; Craig A. Sheldon,
Senior Vice President and CFO; Eric W. Nodiff, Senior Vice
President and General Counsel; and Seth R. Segel, Senior Vice
President - Corporate Development. To participate in the conference
call, dial 877-407-9205 approximately 5 to 10 minutes before the
beginning of the call. If you are unable to participate, a digital
replay of the call will be available from Wednesday, August 3 at
approximately 6:00 p.m. through midnight on August 10, by dialing
877-660-6853 and using pass code # 286 and conference ID #163833.
The call will be simultaneously broadcast live over the Internet on
vcall.com at http://www.vcall.com/CEPage.asp?ID=93107. A replay of
the webcast will be available on Vcall for 30 days. This press
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks and uncertainties, including,
without limitation, the risks detailed in Cantel's filings and
reports with the Securities and Exchange Commission. Such
forward-looking statements are only predictions, and actual events
or results may differ materially from those projected or
anticipated.
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