European interventional cardiology firm Jomed has announced a definitive agreement to acquire intravascular ultrasound developer EndoSonics for $205 million in cash.
The deal gives Beringen, Switzerland-based Jomed complementary products and international sales and manufacturing organizations, as well as access to an established U.S. sales force, according to Jomed president and CEO Tor Peters.
EndoSonics, of Rancho, Cordova, CA, develops intravascular ultrasound visualization products, pressure-monitoring guide wires, and wires for intravascular flow measurement, while Jomed develops and manufactures stents for interventional cardiology.
The transaction has been approved by the boards of both firms. Under the terms of the definitive agreement, Jomed will commence a cash tender offer on or before August 21 for all of the outstanding common stock of EndoSonics at a price of $11 (U.S.) per share. The offer represents a 53% premium over the firm’s closing share price of $7.19 on Friday, August 4. Jomed’s tender offer is expected to close in mid-to-late September.
Of the purchase price, $150 million will be funded through an offering of new Jomed shares, for which the Swiss firm has arranged for financing commitments from Credit Suisse First Boston. The balance of the purchase price will come from Jomed’s existing cash.
Although Jomed expects the acquisition to enhance its earnings in the first full year after the deal, EndoSonics has yet to show a profit in 2000. In its second quarter (end-June 30), EndoSonics reported revenues of $13.1 million, down 5.7% compared with the $13.9 million in sales posted last year. EndoSonics had a net loss of $1.8 million during the period, compared with net income of $1.8 million in the same period in 1999.
By Erik L. Ridley
AuntMinnie.com staff writer
August 7, 2000
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