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Biotech / Medical : Arterial Vascular Engineering AVEI

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To: mmeggs who wrote (388)	10/27/1998 6:13:00 PM
From: Dave Chanoux	Read Replies (1) of 410

Perhaps I can articulate the opposite point of view (like a debate, nothing personal): AVEI has just taken on $600 Million in debt to acquire the Bard division. That is approximately $10 per share; annual interest expense I estimate at $.80 per share, before tax. Of course, one would expect the Bard business (estimated at $200 Million revenue per year) to generate some profit to offset this expense. BUT #1: At closing Bard says they sold the division to generate funds to pay down debt and buy back stock. Sounds like they would rather not be in the business. BUT #2: This has been a troubled division of Bard. I recall contaminated product, falsified records, indicted management, one plant closed and consolidated into the current operation. And it is located 3000 miles away from Santa Rosa in Billerica MA. (Please be skeptical of my memory, check for yourself). Add these BUTS to the risk of patent infringement and all the other things discussed here in the last few months and one may get an urge to sell. Does this hold water? Contrary opinions? Regards, Dave Chanoux

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