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Significantly bolsters CONMED’s Advanced Surgical portfolio
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CONMED to host conference call today at 8:00 a.m. ET
UTICA, N.Y.--(BUSINESS WIRE)--Nov. 16, 2015--
CONMED Corporation (NASDAQ: CNMD) today announced a definitive
agreement to acquire privately-held SurgiQuest, Inc. (SurgiQuest) for
$265 million on a cash-free, debt-free basis. The transaction will be
financed through a combination of cash and borrowings under a new credit
facility. The transaction is subject to customary closing conditions,
including receipt of U.S. regulatory approval, and is expected to close
in the first quarter of 2016.
Founded in 2006 and headquartered in Milford, Connecticut, SurgiQuest
develops, manufactures, and markets the AirSeal® System
(AirSeal), the first integrated access management technology for use in
laparoscopic and robotic procedures. AirSeal consists of a valve-free
trocar with continuous pressure sensing and an integrated insufflator
and smoke evacuator. AirSeal has been used in more than 250,000
procedures worldwide. Published clinical data demonstrates that AirSeal
leads to shorter procedure times and reduced post-operative pain.
“Revitalizing the Advanced Surgical business is a key element of our
general surgery strategy, and this transformative acquisition uniquely
bolsters the progress we have made. The AirSeal® System is a
highly differentiated technology which is fast becoming the standard of
care in laparoscopic and robotic surgery where it delivers benefits for
the patient, the surgeon, and the hospital. We are very excited to add
it to our growing Advanced Surgical portfolio,” commented Curt R.
Hartman, President and Chief Executive Officer of CONMED. “We
congratulate and welcome SurgiQuest’s talented management and its
scientific and sales teams to CONMED. We look forward to joining forces
once the transaction closes and providing industry leading technologies
to our global customer base.”
Kurt Azarbarzin, SurgiQuest’s Founder and Chief Executive Officer,
added, “We are excited to become part of CONMED. We believe that the
combination of our organizations’ salesforces, the addition of our
research and development expertise, as well as our keen focus on
innovation, will enable us to expand our collective market share and to
provide distinctively better solutions that improve both the doctor and
patient experience.”
Mr. Azarbarzin will join CONMED as Chief Technology Officer of the
Advanced Surgical business. He will report to Bill Peters, Vice
President and General Manager of Advanced Surgical.
Financial Highlights
Based on the anticipated date of closing, CONMED does not expect the
acquisition to have a material impact on fiscal year 2015 operating
results. In fiscal year 2016, the acquisition is expected to add $55 to
$60 million to the Company’s revenue. Further, the Company projects net
cost savings will approximate $15 million per year.
The Company plans to transition to reporting on an adjusted cash EPS
basis for fiscal year 2016, and it will provide additional guidance
regarding the financial impact of the transaction when it reports fourth
quarter financial results in January. On an adjusted cash EPS basis, the
Company expects the acquisition will provide double-digit accretion to
fiscal 2016 earnings. Inclusive of intangible amortization, the Company
expects the acquisition to be slightly dilutive to fiscal 2016 earnings
and to generate double-digit earnings accretion thereafter. Acquired
intangibles are expected to be a significant component of the purchase
price allocation, and amortization estimates are based on a preliminary
valuation, which are subject to change.
Conference Call
In conjunction with this release, CONMED management will host a
conference call today at 8:00 a.m. ET. To participate in the conference
call, dial 877-703-6106 (domestic) or 857-244-7305 (international) and
enter passcode 37397493.
This conference call will also be webcast and can be accessed from the
“Investors” section of CONMED's web site at www.conmed.com.
The webcast replay of the call will be available at the same site
approximately one hour after the end of the call.
A recording of the call will also be available from 9:00 a.m. ET on
Monday, November 16, 2015, until 11:59 p.m. ET on Monday, November 23,
2015. To hear this recording, dial 888-286-8010 (domestic) or
617-801-6888 (international) and enter the passcode 49859903.
Advisors
J.P. Morgan is acting as financial advisor and Sullivan & Cromwell LLP
is acting as legal counsel for CONMED in connection with the
transaction. Piper Jaffray & Co. is acting as financial advisor and
Wiggin & Dana LLP is acting as legal counsel for SurgiQuest in
connection with the transaction.
About CONMED Corporation
CONMED is a medical technology company that provides surgical devices
and equipment for minimally invasive procedures. The Company’s products
are used by surgeons and physicians in a variety of specialties,
including orthopedics, general surgery, gynecology, neurosurgery and
gastroenterology. The Company distributes its products worldwide from
several manufacturing locations. CONMED has a direct selling presence in
16 countries outside the United States, and international sales
constitute over 50% of the Company’s total sales. Headquartered in
Utica, New York, the Company employs approximately 3,400 people. For
more information, visit www.conmed.com.
About SurgiQuest, Inc.
SurgiQuest, Inc. is a privately-held venture-backed company, founded in
May 2006. The Company develops, manufactures and markets innovative
access technologies for minimally invasive surgery. SurgiQuest's
patented AirSeal System optimizes the laparoscopic environment and
provides unparalleled stability in the abdominal cavity during MIS.
Unlike conventional insufflation and trocar systems, the Company's
breakthrough integrated platform ensures stable pneumoperitoneum,
continuously evacuates smoke and plume when energized medical devices
such as electro-cautery, laser or ultrasound are used, and provides
valve-free access to the abdominal cavity during both robotic and
laparoscopic surgical procedures. AnchorPort®, Low Impact®
Laparoscopy, AirSeal®, and SurgiQuest® are
registered trademarks of SurgiQuest, Inc. All rights reserved.
Additional information about SurgiQuest products can be found at www.surgiquest.com.
Forward Looking Information
This press release contains certain forward-looking statements
(including “forward-looking statements” within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995) with respect to the
financial condition, results of operations and business of CONMED and
certain plans and objectives of CONMED. All statements other than
statements of historical or current fact included in this press release
are statements that could be deemed forward-looking statements. Often,
but not always, forward-looking statements can be identified by the use
of words such as “plans,” “expects,” “expected,” “scheduled,”
“estimates,” “intends,” “anticipates” or “believes,” or variations of
such words and phrases, or can state that certain actions, events,
conditions, circumstances or results “may,” “could,” “would,” “might” or
“will” be taken, occur or be achieved. These forward-looking statements
are based upon the current beliefs and expectations of CONMED, members
of its senior management team and its Board of Directors, and are
subject to significant risks and uncertainties, including factors
outside of CONMED’s control. Such risks and uncertainties contained in
forward-looking statements can include, without limitation: prospective
performance and opportunities and the outlook for CONMED’s and
SurgiQuest’s businesses; the ability of CONMED to advance SurgiQuest’s
product lines following the transaction; uncertainties as to the timing
for completion of the transaction; the possibility that various
conditions to complete the transaction may not be satisfied or waived;
transaction costs in connection with the transaction; the potential
effects of the transaction on relationships with employees, customers,
other business partners or governmental entities; the state of the
credit markets generally and the availability of financing; other
business effects, including the effects of industry, economic or
political conditions outside of CONMED’s control; any assumptions
underlying any of the foregoing; and other risks and uncertainties which
may be detailed from time to time in reports filed by CONMED with the
Securities and Exchange Commission. CONMED’s shareholders and other
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and to not place undue reliance on
these forward-looking statements, as actual results may differ
materially from those currently anticipated. All forward-looking
statements are based on information currently available to CONMED, and
CONMED undertakes no obligation to update any such forward-looking
statements as a result of new information, future developments or
otherwise, except as expressly required by law.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151116005639/en/
Source: CONMED Corporation
CONMED Corporation
Luke A. Pomilio, 315-624-3202
Chief
Financial Officer