COLUMBUS, Miss., June 2 /PRNewswire-FirstCall/ -- Microtek Medical Holdings, Inc. announced today that its newly formed Netherlands-based subsidiary, Microtek Medical B.V. ("Microtek") has acquired certain businesses of International Medical Products B.V. and affiliates ("IMP") from Cardinal Health. The acquired businesses include the development, manufacture, marketing and distribution of high quality dip- molded medical devices (primarily ultrasound probe covers), other equipment covers, cardiac thoracic drain systems, gynecological devices and wound care products.
This acquisition, completed on May 28, 2004, is the most recent in a series of strategic acquisitions undertaken by the Company over the past three years and significantly expands Microtek's European operations. The Company estimates this transaction will add revenues of approximately $12 million annually and expects that the acquired businesses will be accretive to earnings beginning in 2005. While the Company indicated that it has not yet completed its revised financial forecast for 2004, the Company believes this transaction will be slightly dilutive to earnings in 2004 and has tentatively revised its forecast for full year 2004 earnings to a range of $0.18 to $0.21 per diluted share.
Financial terms of the agreement were not disclosed.
Dan R. Lee, the Company's President and CEO, stated, "I am very pleased to announce the completion of the IMP acquisition. Strategic acquisitions such as IMP are a significant component of our current business plan and our long- term growth initiatives. The IMP acquisition strengthens Microtek's infection control product offerings to the healthcare industry. Tactically speaking, the IMP acquisition leverages on our marketing strategy of expanding our product lines and distribution channel capabilities into procedural-based specialties and brings a number of exciting opportunities to our Company. Most importantly, the IMP acquisition expands Microtek's platform of product offerings within mainland Europe. The acquisition also adds IMP's Ultracover(R) line of latex and latex-free dipped probe covers to Microtek's existing product portfolio, thereby providing us with attractive marketing opportunities. These products will significantly enhance our own product offerings within the ultrasound specialty, both in Europe and in the U.S. Additionally, the other acquired products are complementary to our equipment and patient draping products, which specifically addresses our goal of having more products for bundling and sale to our customers. This acquisition will enhance our offerings into multiple specialties, including cardiology, gynecology, urology, radiology, gastroenterology and other intra-operating uses."
Mr. Lee continued, "Under the proven expertise of the Company's management team, we strongly believe that the IMP acquisition will provide enhanced revenue contribution as well as improved earnings and increased value for our shareholders over the long term. Additionally, by expanding our European presence, the IMP acquisition offers a great deal of flexibility and operating leverage to enable future expansion of our international businesses."
Mr. Lee remarked, "We, along with Cardinal Health, are fully committed to making the transition of the IMP businesses to Microtek as smooth as possible for our customers, and our respective customer service departments are working together to ensure the highest levels of support."
Actual Results Could Differ From Forward-Looking Statements: This Press Release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, the estimated annual revenue contribution from this transaction, the Company's belief that the acquired businesses will be accretive to earnings beginning in 2005, the Company's belief that the transaction will be slightly dilutive to earnings in 2004, the Company's revised forecast for full year 2004 earnings per diluted share, the Company's belief that the IMP acquisition will provide enhanced revenue contribution as well as improved earnings and increased shareholder value over the long term, and the Company's belief that the IMP acquisition will provide flexibility and operating leverage to enable future expansion of the Company's international businesses. Such statements are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ from those referred to in such statements. These risks include, without limitation, those identified in Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2003, including, without limitation, the risks described in Risk Factors under the captions "-Reliance upon Microtek," "-History of Net Losses," "-Competition," "-Product Liability," "-Stock Price Volatility," "-Dependence on Key Personnel," "-Anti- takeover Provisions," "-Low Barriers to Entry for Competitive Products," "-Potential Erosion of Profit Margins," "-Risks of Completing Acquisitions," "-Risks of Successfully Integrating Acquisitions," "-Small Sales and Marketing Force," "-Reliance upon Distributors," "-Reliance Upon Large Customers," "-Microtek Regulatory Risks," "-Risks of Obsolescence," "-Reduced OREX Market Potential," "OREX Commercialization Risks," "-OREX Manufacturing and Supply Risks," "-Risks Affecting Protection of Technology," "-Risks of Technological Obsolescence" and "-OTI Regulatory Risks." We do not undertake to update our forward-looking statements to reflect future events or circumstances.
About Microtek: The Company, a market leader in the healthcare industry, develops, manufactures and sells infection control products, fluid control products and safety products to healthcare professionals for use in environments such as operating rooms and outpatient surgical centers.
Microtek Medical Holdings, Inc.