- Significantly bolsters CONMED’s
Advanced Surgical portfolio
- CONMED to host conference call today
at 8:00 a.m. ET
CONMED Corporation (NASDAQ: CNMD) today announced a
definitive agreement to acquire privately-held SurgiQuest, Inc.
(SurgiQuest) for $265 million on a cash-free, debt-free basis. The
transaction will be financed through a combination of cash and
borrowings under a new credit facility. The transaction is subject
to customary closing conditions, including receipt of U.S.
regulatory approval, and is expected to close in the first quarter
of 2016.
Founded in 2006 and headquartered in Milford, Connecticut,
SurgiQuest develops, manufactures, and markets the AirSeal® System
(AirSeal), the first integrated access management technology for
use in laparoscopic and robotic procedures. AirSeal consists of a
valve-free trocar with continuous pressure sensing and an
integrated insufflator and smoke evacuator. AirSeal has been used
in more than 250,000 procedures worldwide. Published clinical data
demonstrates that AirSeal leads to shorter procedure times and
reduced post-operative pain.
“Revitalizing the Advanced Surgical business is a key element of
our general surgery strategy, and this transformative acquisition
uniquely bolsters the progress we have made. The AirSeal® System is
a highly differentiated technology which is fast becoming the
standard of care in laparoscopic and robotic surgery where it
delivers benefits for the patient, the surgeon, and the hospital.
We are very excited to add it to our growing Advanced Surgical
portfolio,” commented Curt R. Hartman, President and Chief
Executive Officer of CONMED. “We congratulate and welcome
SurgiQuest’s talented management and its scientific and sales teams
to CONMED. We look forward to joining forces once the transaction
closes and providing industry leading technologies to our global
customer base.”
Kurt Azarbarzin, SurgiQuest’s Founder and Chief Executive
Officer, added, “We are excited to become part of CONMED. We
believe that the combination of our organizations’ salesforces, the
addition of our research and development expertise, as well as our
keen focus on innovation, will enable us to expand our collective
market share and to provide distinctively better solutions that
improve both the doctor and patient experience.”
Mr. Azarbarzin will join CONMED as Chief Technology Officer of
the Advanced Surgical business. He will report to Bill Peters, Vice
President and General Manager of Advanced Surgical.
Financial Highlights
Based on the anticipated date of closing, CONMED does not expect
the acquisition to have a material impact on fiscal year 2015
operating results. In fiscal year 2016, the acquisition is expected
to add $55 to $60 million to the Company’s revenue. Further, the
Company projects net cost savings will approximate $15 million per
year.
The Company plans to transition to reporting on an adjusted cash
EPS basis for fiscal year 2016, and it will provide additional
guidance regarding the financial impact of the transaction when it
reports fourth quarter financial results in January. On an adjusted
cash EPS basis, the Company expects the acquisition will provide
double-digit accretion to fiscal 2016 earnings. Inclusive of
intangible amortization, the Company expects the acquisition to be
slightly dilutive to fiscal 2016 earnings and to generate
double-digit earnings accretion thereafter. Acquired intangibles
are expected to be a significant component of the purchase price
allocation, and amortization estimates are based on a preliminary
valuation, which are subject to change.
Conference Call
In conjunction with this release, CONMED management will host a
conference call today at 8:00 a.m. ET. To participate in the
conference call, dial 877-703-6106 (domestic) or 857-244-7305
(international) and enter passcode 37397493.
This conference call will also be webcast and can be accessed
from the “Investors” section of CONMED's web site at
www.conmed.com. The webcast replay of the call will be available at
the same site approximately one hour after the end of the call.
A recording of the call will also be available from 9:00 a.m. ET
on Monday, November 16, 2015, until 11:59 p.m. ET on Monday,
November 23, 2015. To hear this recording, dial 888-286-8010
(domestic) or 617-801-6888 (international) and enter the passcode
49859903.
Advisors
J.P. Morgan is acting as financial advisor and Sullivan &
Cromwell LLP is acting as legal counsel for CONMED in connection
with the transaction. Piper Jaffray & Co. is acting as
financial advisor and Wiggin & Dana LLP is acting as legal
counsel for SurgiQuest in connection with the transaction.
About CONMED Corporation
CONMED is a medical technology company that provides surgical
devices and equipment for minimally invasive procedures. The
Company’s products are used by surgeons and physicians in a variety
of specialties, including orthopedics, general surgery, gynecology,
neurosurgery and gastroenterology. The Company distributes its
products worldwide from several manufacturing locations. CONMED has
a direct selling presence in 16 countries outside the United
States, and international sales constitute over 50% of the
Company’s total sales. Headquartered in Utica, New York, the
Company employs approximately 3,400 people. For more information,
visit www.conmed.com.
About SurgiQuest, Inc.
SurgiQuest, Inc. is a privately-held venture-backed company,
founded in May 2006. The Company develops, manufactures and markets
innovative access technologies for minimally invasive surgery.
SurgiQuest's patented AirSeal System optimizes the laparoscopic
environment and provides unparalleled stability in the abdominal
cavity during MIS. Unlike conventional insufflation and trocar
systems, the Company's breakthrough integrated platform ensures
stable pneumoperitoneum, continuously evacuates smoke and plume
when energized medical devices such as electro-cautery, laser or
ultrasound are used, and provides valve-free access to the
abdominal cavity during both robotic and laparoscopic surgical
procedures. AnchorPort®, Low Impact® Laparoscopy, AirSeal®, and
SurgiQuest® are registered trademarks of SurgiQuest, Inc. All
rights reserved. Additional information about SurgiQuest products
can be found at www.surgiquest.com.
Forward Looking Information
This press release contains certain forward-looking statements
(including “forward-looking statements” within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995) with respect
to the financial condition, results of operations and business of
CONMED and certain plans and objectives of CONMED. All statements
other than statements of historical or current fact included in
this press release are statements that could be deemed
forward-looking statements. Often, but not always, forward-looking
statements can be identified by the use of words such as “plans,”
“expects,” “expected,” “scheduled,” “estimates,” “intends,”
“anticipates” or “believes,” or variations of such words and
phrases, or can state that certain actions, events, conditions,
circumstances or results “may,” “could,” “would,” “might” or “will”
be taken, occur or be achieved. These forward-looking statements
are based upon the current beliefs and expectations of CONMED,
members of its senior management team and its Board of Directors,
and are subject to significant risks and uncertainties, including
factors outside of CONMED’s control. Such risks and uncertainties
contained in forward-looking statements can include, without
limitation: prospective performance and opportunities and the
outlook for CONMED’s and SurgiQuest’s businesses; the ability of
CONMED to advance SurgiQuest’s product lines following the
transaction; uncertainties as to the timing for completion of the
transaction; the possibility that various conditions to complete
the transaction may not be satisfied or waived; transaction costs
in connection with the transaction; the potential effects of the
transaction on relationships with employees, customers, other
business partners or governmental entities; the state of the credit
markets generally and the availability of financing; other business
effects, including the effects of industry, economic or political
conditions outside of CONMED’s control; any assumptions underlying
any of the foregoing; and other risks and uncertainties which may
be detailed from time to time in reports filed by CONMED with the
Securities and Exchange Commission. CONMED’s shareholders and other
investors are cautioned that any such forward-looking statements
are not guarantees of future performance and to not place undue
reliance on these forward-looking statements, as actual results may
differ materially from those currently anticipated. All
forward-looking statements are based on information currently
available to CONMED, and CONMED undertakes no obligation to update
any such forward-looking statements as a result of new information,
future developments or otherwise, except as expressly required by
law.
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version on businesswire.com: http://www.businesswire.com/news/home/20151116005639/en/
CONMED CorporationLuke A. Pomilio,
315-624-3202Chief Financial Officer
CONMED (NASDAQ:CNMD)
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