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Medtronic To Buy Sofomor Danek In Stock Swap
MINNEAPOLIS (Reuters) - Cardiac device maker Medtronic Inc. (NYSE:MDT - news) said
Monday it would buy neurological device maker Sofamor Danek Group Inc. in a stock swap
valued at more than $3.37 billion.
The deal to buy the fast-growing Memphis, Tenn.-based Sofamor for $115 a share strengthens
Minneapolis-based Medtronic's presence in the neurosurgical business.
''The merger with Sofamor Danek considerably broadens and strengthens Medtronic's market
position and technology in the spinal and neurosurgery field,'' said Medtronic Chairman William W.
George.
''Combined with Sofamor Danek, Medtronic's neurological and spinal product line will be over $1
billion in revenues next fiscal year, growing at 25 percent a year as we move into the 21st century,''
George added. Sofamor Danek's 1998 revenues are expected to approach $400 million on a
worldwide basis, the company said.
Medtronic said John Meslow, president of Medtronic's neurological division, will serve as president
of the company's new neurological and spinal business. Sofamor Danek's chairman and chief
executive officer, E.R. Pickard, will assume responsibility for all of Medtronic's neurosurgery
businesses, including PS Medical and recently acquired Midas Rex, the company said.
Medtronic said that, aside from one-time transaction-related charges, the merger will not affect
income this year and will add several cents a share in 2000, and will add increasingly to earnings in
the following years. The transaction is structured as a tax-free pooling of interests.
The companies said the transaction is subject to certain provisions, including approval from Sofamor
Danek shareholders, regulatory approvals and other customary closing conditions.
Medtronic stock fell 25 cents to $64.75 in composite midmorning New York Stock Exchange
trading. Trading in Sofamor Danek, also on the NYSE, was delayed at the start of trading, but shot
up $8.375 to $110. |
