>>SAN DIEGO--(BUSINESS WIRE)--March 23, 2004--CardioDynamics (Nasdaq:CDIC - News), the innovator and leader of Impedance Cardiography (ICG) technology, today announced it has acquired privately-held Vermed, the electrode division of Vermont Medical, Inc., the leading independent manufacturer of electrocardiograph (ECG) electrodes in the United States. Under the terms of the acquisition, CardioDynamics paid Vermont Medical, Inc. a total purchase price of $16.5 million, including $12 million of cash and $4.5 million of CardioDynamics common stock (approximately 746,000 shares). CardioDynamics funded the cash portion of the transaction out of its existing cash balance combined with borrowing under a $7 million term loan with Comerica Bank. The Company expects the Vermed acquisition to be accretive to its earnings during the balance of fiscal 2004.
Recurring sensor revenue accounted for 17% of CardioDynamics' total revenues in fiscal 2003, and is projected to increase to over 30% in fiscal 2004 with the acquisition of Vermed. In 2005, previously anticipated sensor revenue of 23% is now projected to increase to approximately 37%.
"Vermed is an excellent strategic, financial, and operational fit that we believe will demonstrate immediate value to our shareholders, partners, and customers. In addition to cost, design and manufacturing synergies, the acquisition will enhance the intellectual property of CardioDynamics' ICG sensor technology, increase the recurring sensor revenue mix of our business, and improve predictability of operating results," stated Michael K. Perry, Chief Executive Officer of CardioDynamics. "We welcome the Vermed team to CardioDynamics and are enthusiastic about leveraging our respective talents, technologies and product lines through a combination of our businesses. This acquisition builds on the strong organic growth of our core ICG business and is an important step in our ongoing initiative to accelerate revenue and earnings growth to create additional shareholder value."
Vermed is the leading independent supplier of disposable electrodes and related supplies utilized in ECG and other diagnostic procedures. Founded in 1978 and profitable since 1979, Vermed has developed an excellent reputation for providing top-quality electrodes to a diverse client base of over 3,800 medical suppliers, facilities and physicians. The company has 65 employees and manufactures and packages all electrodes at a single 60,000 square foot, FDA-registered, and ISO 9001 certified facility in Bellows Falls, Vermont. Vermed will operate as a wholly-owned subsidiary of CardioDynamics.<<
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Cheers, Tuck |
