Medical Products Makers To Merge
Cardiac device maker Medtronic Inc. said Monday it will acquire Sofamor Danek Group Inc., a neurological device maker, in a stock deal valued at about $3.4 billion.
Under the agreement, Medtronic (MDT) will exchange $115 worth of its shares for each share of Memphis, Tenn.-based Sofamor Danek (SDG). On Friday, Medtronic shares close down 1 1/8 to 65, while Sofamor Danek rose 4 7/16 to 101 5/8.
The deal will boost Medtronic's presence in the neurosurgical field."The merger with Sofamor Danek considerably broadens and strengthens Medtronic's market position and technology in the spinal and neurosurgery field," said William W. George, Medtronic chief executive.
Aside from one-time charges, Medtronic said the tax-free merger won't affect earnings for the latest fiscal year and will add several cents a share to profits in fiscal 2000.
The $115 per-share purchase price is adjustable depending on the price of Medtronic stock in the 15 days preceding the Sofamor Danek shareholders' meeting on the merger.
Combined with Sofamor Danek, Medtronic's neurological and spinal business segment will produce more than $1 billion in sales next fiscal year, growing at 25 percent annually, Medtronic said.
Sofamor Danek's 1998 revenue is expected to tally close to $400 million.
Written By Jeffry Bartash