Sooner rather than later. Conference call should be interesting.
GUIDANT AGREES TO ACQUIRE COOK GROUP INCORPORATED; ACQUISITION STRATEGICALLY POSITIONS COMPANY FOR LONG-TERM LEADERSHIP IN DRUG ELUTING STENT MARKET BUSINESS EDITORS AND HEALTH/MEDICAL WRITERS
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10:10 ET INDIANAPOLIS--(BW HealthWire)--July 30, 2002--
Guidant Gains Access to Cook Group's $500 Million
Medical Technology Franchise;
Guidant to Hold Conference Call/Webcast Today at 1:00 PM EDT
Guidant Corporation (NYSE:GDT.N) (PCX:GDT), a world leader in the
treatment of cardiac and vascular disease, and Cook Group Incorporated
jointly announced today that Guidant has agreed to acquire Cook Group
Incorporated in a stock-for-stock transaction. This transaction
strategically positions Guidant for long-term global leadership in the
emerging drug eluting stent market.
Under the agreement, Guidant will acquire all of Cook Group
Incorporated for up to $3 billion in Guidant stock, subject to a
maximum issuance of 65.79 million Guidant shares, priced in two
phases. The first phase will be priced at a minimum of $40 per Guidant
share, with a maximum number of shares issued of 41.25 million. The
second phase will be priced at a minimum of $55 per Guidant share,
with a maximum number of shares issued of 24.54 million. At the
maximum share issuance, the transaction is expected to be earnings
neutral in 2003 and substantially accretive in 2004.
Guidant's obligation to complete the acquisition is subject to
certain clinical and legal conditions relating to the ACHIEVE(TM) Drug
Eluting Coronary Stent System. The conditions include positive
clinical results and Guidant's rights to use certain clinical data and
to sell the ACHIEVE product. The transaction is also subject to
shareholder approval, government clearances and other conditions. The
parties anticipate closing in early 2003, subject to the satisfaction
or waiver of conditions.
"This agreement is strategically important as it adds clarity
around our ability to fully participate in the drug eluting stent
market opportunity," stated Ronald W. Dollens, president and CEO,
Guidant Corporation. "Each company brings product development,
manufacturing and marketing expertise thatwill significantly enhance
our business.
"The Cook companies have a long, prominent history of innovation
in cardiovascular and other minimally invasive medical devices and,
like Guidant, have a close, valued working relationship with physician
customers. This strategic transaction leverages each entity's core
competencies and market leading positions to maximize opportunities to
deliver pioneering, lifesaving therapies to patients around the
world," said Dollens.
"As we became more familiar with the Cook companies' financial
performance, with revenues exceeding $500 million in 2001, as well as
its comprehensive product line, including the ZENITH(TM) abdominal
aortic aneurysm graft (not yet approved in the United States) and
products for interventional radiology, we fully recognized the
opportunity to significantly enhance our research and development and
revenues in these strategically important businesses," he continued.
"We are pleased to enter into this agreement with Guidant as it
brings us closer to our mutual goal of advancing breakthrough medical
technologies to patients, clinicians and other key constituents around
the world," stated William A. Cook, founder and chairman of the board
of Cook Group Incorporated. "Our companies have already demonstrated
success in developing and manufacturing paclitaxel eluting stents.
"We have also identified many shared values and cultural
similarities including our commitment to employees and the communities
in which we operate," continued Cook.
Cook Group Incorporated, headquartered in Bloomington, Ind., and
its subsidiaries have approximately 4,400 employees worldwide and
significant operations in the United States, Canada, Australia,
Denmark, Ireland, the rest of Europe and Asia. Cook Group Incorporated
owns a number of businesses that produce products for interventional
radiology, interventional cardiology, urology, neuroradiology,
vascular medicine, critical care and many other disciplines, as well
as allied manufacturing companies that produce specialized industrial
parts used in medical device manufacturing.
"Bill is an entrepreneur and innovator who has built an incredible
business," commented Dollens. "Over the years, and particularly during
the last 11 months, we have developed strong working relationships
with Cook Group Incorporated's management team. The knowledge and
capabilities of these individuals, combined with Guidant's talented
team, will immediately add substantial value.
"As a company headquartered in Indianapolis, Guidant has
consistently demonstrated leadership in our local communities through
employee participation and support of civic and charitable
organizations," stated Dollens. "Both Bill and I are committed to
strengthening and building on this commitment in the communities in
which we operate."
Financial Information
At the maximum share issuance, without any other changes in
Guidant shares outstanding, former Cook Group Incorporated
shareholders will own approximately 18 percent of Guidant. William A.
Cook will have certain rights, including the right to nominate
himself, or his designee, for election as a director of Guidant.
In the first quarter of 2003, the company expects to take one-time
charges for merger-related costs and in-process research and
development expense. Approximately 50 percent of the total transaction
value, as determined on the closing in early 2003, is expected to be
recorded as in-process research and development expense.
"Excluding one-time charges, we expect the transaction to be
earnings neutral to Guidant's 2003 corporate earnings, assuming the
U.S. launch of a drug eluting stent in the fourth quarter," commented
Keith E. Brauer, vice president, finance, and CFO, Guidant.
Conference Call/Webcast
Guidant will host a conference call today, July 30, at 1:00 p.m.
EDT to discuss additional details of the agreement. The call will be
hosted by Guidant's President and CEO RonaldW. Dollens and Vice
President, Finance, and CFO Keith E. Brauer.
The live webcast of Guidant's conference call will be accessible
through Guidant's website at www.guidant.com/webcast or at CCBN's
individual investor center at www.companyboardroom.com. The webcast
will be archived on both websites for future on-demand replay.
Guidant was advised by JPMorgan. Cook Group Incorporated was
advised by Morgan Stanley.
Faegre & Benson LLP provided legal counsel to Guidant. Kozusko
Lahey Harris LLP and Jones, Day, Reavis & Pogue provided legal counsel
to Cook Group Incorporated.
Guidant Corporation pioneers lifesaving technology, giving an
opportunity for better life today to millions of cardiac and vascular
patients worldwide. The company, driven by a strong entrepreneurial
culture of more than 10,000 employees, develops, manufactures and
markets a broad array of products and services that enable less
invasive care for some of life's most threatening medical conditions.
For more information visit www.guidant.com.
This press release includes forward-looking statements concerning
the transaction and financial expectations regarding such transaction.
The statements are based on assumptions about many important factors,
including clinical and regulatory timelines and developments,
continuing litigation developments relating to paclitaxel eluting
stents, integration synergies and costs, timelines for and terms of
governmental approvals of the transaction, competitive and market
developments, general economic conditions (including interest rates)
and other factors listed on exhibit 99 to Guidant's most recent 10-Q.
As such, they involve risks that could cause actual results to differ
materially. The company does not undertake to update its
forward-looking statements.
Additional information
Guidant intends to file a registration statement on Form S-4 in
connection with the transaction, and Guidant and Cook intend to mail a
joint proxy statement/prospectus to their shareholders in connection
with the transaction. Investors and security-holders of Guidant and
Cook are urged to read the joint proxy statement/prospectus when it
becomes available because it will contain important information about
the companies, the transaction, the persons soliciting proxies
relating to the transaction, and related matters. When available,
investors and security-holders may obtain a free copy of the joint
proxy statement/prospectus at the SEC's web site at www.sec.gov. A
free copy of the joint proxy statement/prospectus may also be obtained
from Guidant or Cook.
In addition to the proxy statement, Guidant files annual,
quarterly, and special reports, proxy and information statements, and
other information with the SEC. Investors may read and copy any of
these reports, statements, and other information at the SEC's public
reference room located at 450 5th Street, N.W., Washington, D.C.,
20549, or any of the SEC's other public reference rooms located in New
York and Chicago. Investors should call the SEC at 1-800-SEC-0330 for
further information on these public reference rooms. These SEC filings
are also available for free at the SEC's web site at www.sec.gov. A
free copy of these filings may also be obtained from Guidant by
request to the contact noted above.
Information concerning participants
Guidant and its executive officers and directors may be deemed to
be participants in the solicitation of proxies from Guidant's
shareholders in favor of the transaction. Information about the
directors and executive officers of Guidant may be found in Guidant's
definitive proxy statement for its 2002 annual meeting of shareholders
and in Guidant's annual report on Form 10-K for the fiscal year ended
December 31, 2001.
Cook and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from Cook's shareholders
in favor of the transaction. Information about the directors and
executiveofficers of Cook may be found in the joint proxy
statement/prospectus.
--30--djl/cl*
CONTACT: Guidant Corporation
Steven Tragash, Corporate Communications, 317/971-2031
Andy Rieth, Investor Relations, 317/971-2061 |
