AVE to Acquire World Medical Manufacturing Corporation
Date: 98-04-13 08:11:32 EDT
AVE to Acquire World Medical Manufacturing Corporation, Abdominal Aortic Aneurysm Device Leader
SANTA ROSA, Calif., April 13 /PRNewswire/ -- Arterial Vascular Engineering, Inc. ("AVE") (Nasdaq: AVEI) today announced an agreement to acquire World Medical Manufacturing Corporation ("World Medical"), a leading independent developer, manufacturer and marketer of medical devices for the treatment of abdominal aortic aneurysms ("AAA"). The acquisition will combine AVE's proven ability to effectively compete in new and growing medical device markets with World Medical's expertise in AAA devices, a market currently estimated by industry observers to be worth approximately $400 million worldwide and which is growing rapidly.
Under the terms of the agreement, World Medical's outstanding stock will be exchanged for, and its outstanding stock options converted into, AVE stock and stock options valued at approximately $62 million. The exchange ratio will be determined in accordance with a formula based on the average price of AVE common stock during a period prior to the closing of the acquisition, subject to certain adjustments. The acquisition is intended to be accounted for as a "purchase." AVE expects to incur a significant one-time charge related to the acquisition, largely in connection with the write-off of in- process research and development.
The acquisition is expected to be completed by July 1998 and is subject to the approval of the shareholders of World Medical and certain other conditions. At that time, World Medical will become a wholly owned subsidiary of AVE. In connection with the acquisition, AVE has entered into voting agreements with certain directors, officers and significant stockholders of World Medical, pursuant to which they have agreed to vote their shares, totaling more than 50% of World Medical's outstanding common stock, in favor of the acquisition.
"The acquisition of World Medical represents a significant step in developing our business outside of coronary stents," said Bob Lashinski, AVE's vice president of business development. "World Medical has built a strong, growing business around its several endovascular products, particularly its Talent(TM) system for the treatment of AAA. It has also earned an outstanding reputation among physicians abroad for the quality of its devices."
"AVE and World Medical share a vision of providing the best available technology to persons suffering from various forms of cardiovascular disease," continued Mr. Lashinski. "Consistent with this vision, we believe the synergy between World Medical's experience in AAA devices and AVE's experience with developing new cardiovascular markets should create a powerful catalyst for market growth. We believe that the market demands less invasive treatment alternatives to open surgery for the repair of aneurysms, particularly in those many cases where a physician determines that invasive surgery may be too risky or complicated. Together, we believe that we have the expertise, the technology, the products, and the industry relationships to drive minimally invasive AAA treatment into the mainstream of medical practice. We look forward to leveraging the leadership of our coronary stent systems, and our expected greater revenue stream, to this new market opportunity."
"We believe that World Medical is well positioned to continue its dynamic growth and to extend its success in the market for endovascular stent grafts," said Howard J. Leonhardt, president and chief executive officer of World Medical. "AVE's experience base, financial resources and its marketing and customer relations strengths should enhance World Medical's business in the future. We are delighted by this opportunity to become a part of a broadly focused cardiovascular disease treatment company that has had such a consistent history of accomplishment."
World Medical, headquartered in Sunrise, Florida, designs, develops, manufactures and markets endovascular devices for diagnosing, monitoring and treating patients with cardiovascular disease. Its Talent(TM) system for the treatment of a wide variety of AAAs and thoracic aortic aneurysms is currently sold in selected countries outside of the United States and is in clinical trials in the United States. In addition to the Talent(TM) system, World Medical markets a line of cardiovascular catheters and has in development other medical devices for the treatment of cardiovascular disease.
Headquartered in Santa Rosa, California, Arterial Vascular Engineering, Inc. is a leading provider of highly specialized stent and balloon angioplasty systems for less invasive interventional treatment of cardiovascular disease. AVE sells its stent and balloon angioplasty systems in more than 40 countries, including its coronary stent systems in the United States.
Except for the historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties, including variations in the level of sale and earnings, the ability to manage growth effectively, the ability to successfully introduce and achieve market acceptance for new products and continued demand for products generally, the effects of competition and pricing pressure, the rapid and significant technological change that characterizes the medical device industry and the ability to continue to respond to such technological change, as well as the other risks detailed from time to time in documents filed by AVE with the SEC, including the report on Form 10-K for the year ended June 30, 1997 and the report on Form 10-Q for the quarterly period ended December 31, 1997.
SOURCE Arterial Vascular Engineering, Inc.