- Excellent strategic fit with Cardinal Health's Clinical and
Medical Products sector DUBLIN, Ohio and CONSHOHOCKEN, Penn., May
14 /PRNewswire-FirstCall/ -- Cardinal Health, a global provider of
products and services that improve the safety and productivity of
health care, and VIASYS Healthcare, a leading medical technology
company, today announced a definitive agreement for Cardinal Health
to acquire VIASYS for approximately $1.5 billion, including the
assumption of outstanding debt. Under the agreement, Cardinal
Health will make a cash tender offer to acquire all outstanding
shares of VIASYS common stock at a price of $42.75 per share. With
2006 revenue of $610 million, VIASYS is a leader in respiratory
care, developing and marketing systems for critical care and
diagnostic use. VIASYS is also a leader in neurological, audio and
vascular diagnostics, disposable medical products used in surgical
procedures and enteral feeding, orthopedic implant manufacturing
and clinical services. The acquisition will expand Cardinal
Health's clinical and medical product offerings for global,
acute-care customers and, combined with its complementary
respiratory products business, will establish the company as a
leader in the more than $4 billion respiratory care market. The
acquisition will also provide a range of complementary products to
Cardinal Health's medical disposables business and will leverage
its integrated hospital selling organization in the U.S. Worldwide,
VIASYS has more than 7,000 hospital customers in 100 countries and
generates 40 percent of its revenue from customers outside the
U.S., adding substantially to Cardinal Health's international
presence. "VIASYS is a perfect strategic fit with our mission to
help providers make health care safer and offers immediate revenue
and earnings opportunities in key geographies worldwide," said R.
Kerry Clark, chief executive officer of Cardinal Health. "With a
strong platform and excellent momentum in our Clinical and Medical
Products businesses, we think the timing is ideal to broaden our
offering. We have developed a process through our recent
acquisitions - particularly Alaris - that will serve as a model for
the rapid integration and realization of synergies with the VIASYS
acquisition." Strategic Fit With complementary product lines,
operations and geographies, the acquisition will enable Cardinal
Health to: -- Deliver comprehensive bedside, patient safety
offerings to acute-care customers: VIASYS will expand Cardinal
Health's industry-leading product and service offerings that help
customers address the most critical and costly areas of patient
safety. This portfolio will include Alaris(R), Pyxis(R) and
CareFusion(TM) products to address medication errors and adverse
drug events; MedMined(R) to target and reduce hospital-acquired
infections; patented surgical drapes, gowns, gloves and instruments
that help prevent surgical site infections; and now VIASYS'
Avea(R), Vela(R), PULMONETIC(TM) and SensorMedics(R) products to
improve critical care and reduce ventilator-associated pneumonia.
-- Better serve customers globally: With 40 percent of its revenue
coming from customers outside the U.S., VIASYS also will advance
Cardinal Health's goal to grow in Western Europe and Asia. VIASYS
has well- established relationships and market expertise through a
direct sales force and a distributor network to support the growth
of Cardinal Health's clinical and medical products worldwide. --
Enhance its product and intellectual property portfolio: VIASYS has
a commitment to innovation that has enabled it to grow faster than
the industry by developing a pipeline of technologically superior
products. By incorporating this technology into its patient bedside
strategy, Cardinal Health can ultimately enable hospitals to better
manage all forms of medication delivered, while collecting data on
usage and outcomes to improve patient care. The acquisition
broadens Cardinal Health's product offerings to diagnostics where
VIASYS is a leading manufacturer of systems and supplies used to
diagnose and monitor sleep, lung, vascular, auditory and brain
disorders. Its leading brands include Jaeger(R), Micro Medical(TM),
SensorMedics(R), Grason-Stadler(R) and Nicolet(R). -- Realize
synergies through existing capabilities and platforms: Synergies
from the transaction are expected to reach $85 million to $100
million per year on a pretax basis by fiscal 2010. As a result, the
transaction is expected to be accretive to earnings in fiscal 2009
and meaningfully accretive in fiscal 2010. With 20 percent of
VIASYS revenue generated from the sale of disposable supplies,
Cardinal Health sees immediate sales and cost-reduction
opportunities through its complementary consumables business that
already develops disposable components for VIASYS and other
respiratory and anesthesia equipment manufacturers. Other synergies
include international product sales opportunities through existing
VIASYS dealers and direct customer relationships; manufacturing
efficiencies; sourcing improvements; and efficiencies through
Cardinal Health's shared services organization. "Our management
team is excited about the tremendous potential for growth this
acquisition brings us," said Randy Thurman, chairman, president and
chief executive officer of VIASYS Healthcare. "In addition to the
exceptional product fit between our two companies, there is a
strong cultural fit among our management teams, and our missions -
to improve the safety of health care - are well-aligned. We are
very focused on making this shared mission a success for global
customers." Outlook, Share Repurchase Plan Cardinal Health
confirmed its outlook for the current fiscal year, with non-GAAP
diluted earnings per share (EPS) from continuing operations
expected to be $3.32 to $3.40. While the VIASYS acquisition is
expected to have up to a $0.10 dilutive impact on non-GAAP EPS in
fiscal 2008, Cardinal Health reiterated the range it previously
provided of $3.95 to $4.15, including the impact of the VIASYS
acquisition and use of proceeds from the sale of its Pharmaceutical
Technologies and Services (PTS) segment to repurchase shares.
Consistent with Cardinal Health's approach to acquisitions, VIASYS
is expected to generate positive economic profit and returns above
its cost of capital within the third year after the purchase.
Cardinal Health said there would be no changes to its current share
repurchase plans. The company expects to complete the repurchase of
$3.1 billion in shares with net proceeds from the PTS divestiture
by the end of the first quarter of fiscal 2008, bringing
repurchases since the beginning of fiscal 2007 to $4.1 billion. In
addition, it does not expect the acquisition to alter its long-term
repurchase plans, which it estimates will include up to an
additional $1 billion repurchase of shares in fiscal 2008, subject
to board approval. Merger Agreement Overview The merger agreement
entered into by Cardinal Health and VIASYS Healthcare, which has
been approved by both companies' boards of directors, provides for
Cardinal Health to acquire VIASYS in a two-step transaction. The
first step will consist of a cash tender offer to be made by a
wholly owned subsidiary of Cardinal Health for all outstanding
shares of VIASYS common stock at a price of $42.75 per share in
cash. If the tender offer is not completed within 45 days of the
date of the merger agreement, the price per share will be increased
by an amount equal to $0.007027 per day multiplied by the number of
days between the 45th day of the date of the merger agreement and
the date of first acceptance of VIASYS shares in the tender offer.
In the second step, the tender offer will be followed by a merger
in which the holders of the outstanding shares of VIASYS common
stock not purchased in the tender offer will receive the same per
share price paid in the tender offer, in cash, without interest.
Upon completion of the merger, VIASYS will become a wholly owned
subsidiary of Cardinal Health. The tender offer will be conditioned
upon a majority of the outstanding shares of VIASYS common stock
being tendered into the offer and will also be subject to
regulatory clearances and other customary terms and conditions. The
transaction is expected to be completed this summer. Conference
Call Cardinal Health will host a conference call and audio webcast
for investors, reporters and financial analysts at 9 a.m. eastern
daylight time (EDT) to discuss the acquisition. Participants can
access the call by dialing (617) 213-8068, passcode 78155933, or
the webcast at the Investors page of
http://www.cardinalhealth.com/. A transcript and replay will be
available at http://www.cardinalhealth.com/. About VIASYS
Healthcare VIASYS Healthcare Inc. (NYSE:VAS) is a global,
research-based medical technology company focused on respiratory,
neurology, medical disposable and orthopedic products. VIASYS
products are marketed under well-recognized trademarks, including,
among others, AVEA(R), BEAR(R), BIRD(R), CORFLO(R), CORPAK(R),
EME(R), GRASON-STADLER(R), JAEGER(TM), LYRA(R), MEDLEC(R),
MICROGAS(R), NAVIGATOR(R), NICOLET(R), NicoletOne(TM),
PULMONETIC(TM), SENSORMEDICS(R) TECA(R), TECOMET(TM), VELA(R) and
VMAX(R). VIASYS is headquartered in Conshohocken, Penn., and its
businesses are conducted through its Respiratory Care (annual
revenue of $406 million), NeuroCare (annual revenue of $128
million), MedSystems (annual revenue of $35 million) and
Orthopedices (annual revenue of $42 million) business units. More
information can be found at http://www.viasyshealthcare.com/.
VIASYS' Products and Services VIASYS' respiratory care ventilators
are some of the most technologically advanced devices available,
with precise computer controllers and a simple graphical user
interface. Advanced monitoring capabilities provide clinicians with
critical information, such as automatic inflection point
calculations and esophageal pressure monitoring. VIASYS'
respiratory diagnostic systems are used to diagnose and treat
pulmonary disease and sleep disorders, provide exercise and
nutritional assessments and measure pulmonary capacity. VIASYS is
also the leading manufacturer of instrumentation for monitoring the
brain, muscles, blood flow, hearing, and nerves. In addition, the
company manufactures orthopedic implants for orthopedic device
manufacturers and related instruments for surgical reconstruction,
trauma care, spinal and cranio-maxillofacial treatment and other
disposable products for use in hospitals. About Cardinal Health
Headquartered in Dublin, Ohio, Cardinal Health, Inc. (NYSE:CAH) is
an $80 billion, global company serving the health-care industry
with products and services that help hospitals, physician offices
and pharmacies reduce costs, improve safety, productivity and
profitability, and deliver better care to patients. With a focus on
making supply chains more efficient, reducing hospital-acquired
infections and breaking the cycle of harmful medication errors,
Cardinal Health develops market-leading technologies, including
Alaris(R) IV pumps, Pyxis(R) automated dispensing systems,
MedMined(R) data mining software and the CareFusion(R) patient
identification system. The company also manufactures medical and
surgical products and is one of the largest distributors of
pharmaceuticals and medical supplies worldwide. Ranked No. 19 on
the Fortune 500 and No. 1 in its sector on Fortune's ranking of
Most Admired firms, Cardinal Health employs more than 40,000 people
on five continents. More information about the company may be found
at http://www.cardinalhealth.com/. Important Information This press
release is neither an offer to purchase nor a solicitation of an
offer to sell securities. The tender offer for the outstanding
shares of VIASYS Healthcare Inc. ("VIASYS") common stock described
in this press release has not commenced. At the time the expected
tender offer is commenced, Cardinal Health, Inc. or a wholly owned
subsidiary of Cardinal Health, Inc. will file a tender offer
statement on Schedule TO with the U.S. Securities and Exchange
Commission (the "SEC"), and VIASYS will file a
solicitation/recommendation statement with respect to the tender
offer. Investors and VIASYS stockholders are strongly advised to
read the tender offer statement (including the offer to purchase,
letter of transmittal and other offer documents) and the related
solicitation/recommendation statement because they will contain
important information. When available, the offer to purchase, the
related letter of transmittal and certain other offer documents, as
well as the solicitation/recommendation statement, will be made
available to all stockholders of VIASYS at no expense to them.
These documents will also be available at no charge at the SEC's
website at http://www.sec.gov/. Non-GAAP Financial Measures
Cardinal Health presents non-GAAP diluted EPS from continuing
operations, which is (earnings from continuing operations,
excluding special items and impairment charges and other, both net
of tax) divided by diluted weighted average shares outstanding. The
most directly comparable forward-looking GAAP measure is diluted
EPS from continuing operations. Cardinal Health is unable to
provide a quantitative reconciliation of this forward-looking
non-GAAP measure to the most directly comparable forward-looking
GAAP measure because the Company cannot reliably forecast special
items and impairment charges and other, which are difficult to
predict and estimate and are primarily dependent on future events.
Please note that the unavailable reconciling items could
significantly impact Cardinal Health's future net earnings.
Cautions Concerning Forward-Looking Statements Except for
historical information, all other information in this news release
consists of forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended. These
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those
projected, anticipated or implied. The most significant of these
uncertainties are described in Cardinal Health's Form 10-K, Form
10-Q and Form 8-K reports (including all amendments to those
reports) and exhibits to those reports, and include (but are not
limited to) the following: successful completion of the proposed
acquisition on a timely basis; the impact of regulatory reviews on
the proposed transaction; the ability to achieve synergies
following completion of the proposed acquisition; competitive
pressures in its various lines of business; the loss of one or more
key customer or supplier relationships or changes to the terms of
those relationships; changes in the distribution patterns or
reimbursement rates for health-care products and/or services; the
results, consequences, effects or timing of any inquiry or
investigation by any regulatory authority or any legal and
administrative proceedings, or settlement discussions with
regulatory authorities or plaintiffs in any action against the
company; uncertainties related to completing a settlement of the
class-action securities litigation or, if completed, obtaining
court approval of the settlement; with respect to future share
repurchases, the approval of the board of directors, which is
expected to consider Cardinal Health's then-current stock price,
earnings, cash flows, financial condition and prospects as well as
alternatives available to Cardinal Health at the time any such
action is considered; and general economic and market conditions.
Except to the extent required by applicable law, Cardinal Health
undertakes no obligation to update or revise any forward-looking
statement. DATASOURCE: Cardinal Health CONTACT: Media: Jim Mazzola,
+1-614-757-3690, , or Investors: Bob Reflogal, +1-614-757-7542, ,
both of Cardinal Health; Martin Galvan, VIASYS Healthcare,
+1-610-862-0800, Web site: http://www.cardinalhealth.com/
http://www.viasyshealthcare.com/
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