LITTLE FALLS, N.J.,
Aug. 2, 2011 /PRNewswire/ -- CANTEL
MEDICAL CORP. (NYSE: CMN), through its Minntech subsidiary, has
acquired the business and substantially all of the assets of Byrne
Medical, Inc. Byrne Medical, privately-owned and based
outside Houston, TX, designs,
manufactures and sells an innovative array of disposable infection
control products intended to replace the necessity of sterilizing
and reusing numerous components used in gastrointestinal (GI)
endoscopy procedures.
For the twelve months ended June 30,
2011, Byrne Medical generated revenues of approximately
$38.6 million and pre-tax income of
$8.6 million. After adjusting
for the shareholders' compensation and other non-recurring
expenses, the pre-tax income would be approximately $11.5 million for the twelve-month period.
Capitalizing on Byrne Medical's 20%+ historic growth profile,
Cantel expects an increase in overall corporate gross margins and
anticipates the acquisition to be accretive in Cantel's first
fiscal year ending July 31, 2012
(inclusive of the expenses resulting from purchase accounting,
financing, and deal-related costs).
The purchase price was $100.0
million, comprised of $90.0
million in cash and 401,123 shares of restricted Cantel
stock (valued at $10.0 million) that
is subject to a multi-year lock-up and three-year price floor.
In addition, there is a contingent earnout of up to
$10 million payable over two years
based on gross profit growth targets of the acquired business.
Cantel will also be purchasing certain land and buildings
utilized by the Byrne Medical business for $5.9 million so as to further develop a
world-class, disposables manufacturing operation in Houston. The founder and principal
owner, Don Byrne, has entered into a
three-year employment agreement and separate non-compete
agreement.
In purchasing Byrne Medical, Cantel has greatly expanded its
hospital and outpatient center-based GI endoscopy business, which
includes its market leading Medivators® post-procedure cleaning
business. With this acquisition, the company has entered into the
market for infection prevention and control products in the
endoscopy procedure room itself. Cantel's collective
endoscopy business, with approximately 80 sales consultants and
clinical specialists, now offers the GI professional an
unparalleled level of expertise and solutions to mitigate infection
risks across the full endoscopy procedure cycle.
With the respective mottos of "Infection Control Matters™" and
"Dedicated to Infection Prevention and Control," Byrne Medical and
Cantel have built their businesses around a shared commitment.
Byrne Medical's initial products, the Endo SmartCap® and the
EndoGator®, pioneered the movement to disposable alternatives for
reusable water bottles and irrigation tube sets used in GI
endoscopy procedures. The company now offers an extensive
suite of universally applicable infection control solutions
including sterile, single-use air/water, suction and biopsy
valves.
According to Andrew Krakauer,
Cantel Medical's President and CEO, "This is the largest
transaction in Cantel's history and clearly an important event.
It is very exciting to have two leading endoscopy product
businesses as a part of Cantel. Building upon the tremendous growth
and momentum in our Medivators endoscope reprocessing segment,
Byrne Medical perfectly complements our strategic vision of
expanding our presence in the hospital with higher margin,
innovative disposables that greatly improve infection prevention
and control. We see a growing trend by healthcare providers
in GI Endoscopy to minimize risks and reduce the complexities
associated with manual cleaning and disinfection of reusable items.
The successful debut of our new Medivators endoscope
reprocessors and single-use high-level disinfectants, along with
the robust demand experienced for the Byrne Medical products,
attest to this growing world-wide movement."
Krakauer continued, "I am particularly impressed with Byrne
Medical's distinctive understanding of the issues faced by the
frontline GI medical personnel and the ability to translate that
into ingenious products that solve real problems. Don Byrne
has created an outstanding, customer-focused company with great
products, excellent manufacturing capabilities, a very effective
consultative sales force and an impressive management team."
Don Byrne, President of Byrne
Medical commented, "With so many opportunities in our sights, we
believe Cantel is the perfect partner to aid us in accelerating our
growth plans. There is an excellent cultural fit between our
companies, and we share an uncompromising commitment to assist
healthcare providers in mitigating infection control risks. I
am so proud of what we have accomplished, and I am very thankful to
the entire Byrne Medical team. We are all excited to take
this business to the next level in our partnership with Cantel and
Minntech."
To finance the transaction, Cantel Medical initiated a new,
five-year $150.0 million credit
facility ($100.0 million revolver and
$50.0 million term loan) with its
existing syndicate comprised of Bank of America, Wells Fargo and
PNC Bank.
In accounting for the transaction, both the $10 million of restricted stock-with-a-floor and
the potential $10 million in
additional contingent consideration will result in mark-to-market
fluctuations in future reported earnings of Cantel Medical.
Any such significant movements will be highlighted in the
announcement of those results.
The Company will hold a conference call to discuss the
acquisition of Byrne Medical on Wednesday,
August 3, 2011 at 11:00 AM Eastern
time. To participate in the conference call dial (877)
407-8033 or (201) 689-8033 approximately 5 minutes before the
beginning of the call. If you are unable to participate, a digital
replay of the call will be available through midnight on
August 17, 2011 by dialing (877)
660-6853 and using passcode #286 and conference ID # 376814.
The call will simultaneously be broadcast live over the Internet
at http://www.investorcalendar.com/IC/CEPage.asp?ID=165439. A
replay of the webcast will be available until November 3, 2011.
About Medivators Business Group
Medivators is a Business Group of Minntech Corporation, a
subsidiary of Cantel Medical Corp. Minntech, founded in 1974,
has its headquarters and major manufacturing operations in
Minneapolis, Minnesota.
Medivators assists healthcare professionals in minimizing
endoscopy-related nosocomial infections through the design,
manufacture, and marketing of a comprehensive range of endoscope
reprocessing equipment, high-level disinfectants, detergents,
flushing aids, neutralizers, leak and fluid detection systems, and
a broad array of accessories. For further information, visit
the Minntech website at http://www.minntech.com or
http://www.medivators.com.
About Cantel Medical Corp.
Cantel Medical Corp. (NYSE:CMN) is a leading provider of
infection prevention and control products in the healthcare market.
Our products include water purification equipment, sterilants,
disinfectants and cleaners, specialized medical device reprocessing
systems for endoscopy and renal dialysis, disposable infection
control products primarily for the dental industry, dialysate
concentrates and other dialysis supplies, hollow fiber membrane
filtration and separation products for medical and non-medical
applications, and specialty packaging for infectious and biological
specimens. We also provide technical maintenance for our products
and offer compliance training services for the transport of
infectious and biological specimens. For further information,
visit the Cantel website at http://www.cantelmedical.com.
About Byrne Medical, Inc.
Byrne Medical is fully committed to the pursuit of delivering
infection prevention solutions that will reduce potential risks to
caregivers and patients in GI Endoscopy. Don Byrne, Founder
and President, started the company in 1997 in Conroe, Texas with a single, disposable
product and a vision to improve infection control practices.
Today, with a full-range of unique product solutions, Byrne
Medical has become a recognized leader at the forefront of patient
care and safety in GI Endoscopy. Ernst & Young LLP
recently honored Don Byrne with the
Entrepreneur Of The Year® 2011 Gulf Coast Area Award in the
Manufacturing and Distribution category. For further
information, visit the Byrne Medical website at
http://www.byrnemedical.com.
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.
SOURCE Cantel Medical Corp.