LIONVILLE, Pa. and RA'ANANA, Israel, July 5 /PRNewswire-FirstCall/ -- West Pharmaceutical Services, Inc. , the global market leader in closure systems and syringe components for use with injectable drugs, today announced the acquisition of privately-held and Israel-based Medimop Medical Projects, Ltd., a leading developer of disposable medical devices for the mixing, transfer, reconstitution and administration of injectable drugs. The transaction is expected to close in the third quarter of 2005.
Under the acquisition agreement, West will acquire 90% of Medimop's shares, paying $36 million in cash, West shares valued at $4 million and up to $1.8 million of contingent cash consideration. Freddy Zinger, founder and president of Medimop, will continue to hold the remaining 10% ownership of the company, which West will have the option to acquire at fair value in the future.
The acquisition will be financed with the proceeds from West's recently expanded bank debt and from planned private lender debt. West anticipates that the acquisition of Medimop will be earnings-neutral for 2005 on sales of approximately $8 million for the second half of the year.
"We believe this acquisition is a strong strategic fit with our business in the injectable drug market and demonstrates our commitment to products that improve the safety and effectiveness of drug administration," commented Steven A. Ellers, President and Chief Operating Officer of West Pharmaceutical Services, Inc. "West's goal is to create value by providing our customers with a broad range of components and assembled devices that can make drug products safer and easier to use, from production and packaging through the point of use."
Mr. Zinger added, "I am pleased with the acquisition by West and believe that the growth of Medimop's standard-setting products and technologies will be further enhanced through West's sales and marketing reach and it's depth of experience in supplying pharmaceutical and medical device clients with critical components."
Medimop provides customers with technologies and systems to enhance the reconstitution, transfer and administration of pharmaceutical products in therapeutic areas including multiple sclerosis, rheumatoid arthritis, vaccines, hormones and blood derivatives for haemophilia. Medimop's products, such as MIXJECT(R), offer customers a range of solutions for drug products requiring additional handling at the point of use, the market entered directly by West through the licensing and development of its Clip'n'Ject(R) product, a proprietary, single use drug reconstitution system currently in commercial use on one drug product. Many drug products, including the majority of recently introduced biotechnology products, require reconstitution at the point of use because they are produced as freeze-dried powders in order to preserve product efficacy during shipment and storage.
Medimop's business and management team will remain in Ra'anana, Israel. Medimop has approximately 20 employees and manufactures its products at locations in Israel and Germany.
About West Pharmaceutical Services, Inc.
West Pharmaceutical Services, Inc. is the world's premier manufacturer of components and systems for injectable drug delivery, including stoppers and seals for vials, and closures and disposable components used in syringe, IV and blood collection systems. The Company also provides products with application to the personal care, food and beverage markets. West's customers include the world's leading pharmaceutical, biotechnology, generic drug and medical device producers. Headquartered in Lionville, Pennsylvania, West Pharmaceutical supports its partners and customers from 50 locations throughout North America, South America, Europe, Mexico, Japan, Asia and Australia. For more information, visit West at http://www.westpharma.com
About Medimop Medical Projects Ltd.
Headquartered in Ra'anana, Israel, Medimop Medical Products Ltd. is a privately-held drug delivery device company that creates, develops, manufactures and markets novel disposable medical devices for pharmaceutical mixing, transfer, reconstitution and administration. Medimop conducts manufacturing operations in Israel and Germany. Sales and marketing activities for the company are conducted from Israel, Germany and the US. For more information, visit Medimop at http://www.medimop.com
Cautionary Statement Regarding Forward-Looking Information
The information contained in this document and the attachment is as of July 5, 2005. Both companies assume no obligation to update any forward- looking statements contained in this document as a result of new information or future events or developments.
Certain statements contained in this press release or in other company documents and certain statements that may be made by management of the Company orally may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historic or current facts. They use words such as "estimate," "expect," "intend," "believe," "plan," "anticipate" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance or condition. In particular, these include statements concerning future actions, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings and financial results.
Because actual results are affected by risks and uncertainties, the Company cautions investors that actual results may differ materially from those expressed or implied in any forward-looking statement.
It is not possible to predict or identify all such risks and uncertainties, but factors that could cause the actual results to differ materially from expected and historical results include, but are not limited to: sales demand; obtaining the necessary governmental consents to the acquisition of Medimop Medical Products; the availability of required financing; the timing and commercial success of customers' products incorporating the combined companies' products and services; maintaining or improving production efficiencies and overhead absorption; competition from other providers; the Company's ability to develop and market value-added products; the average profitability, or mix, of products sold in a reporting period; financial performance of unconsolidated affiliates; the potential impact of the Medicare Prescription Drug, Improvement and Modernization Act of 2003; strength of the US dollar in relation to other currencies, particularly the Euro, UK pound, Danish Krone and Singapore Dollar; inflation; US and international interest rates; returns on pension assets in relation to the expected returns employed in preparing the Company's financial statements; raw material price escalation, particularly petroleum-based raw materials and energy costs; the resolution of Kinston-related litigation; realization of the Company's investment in the clinical services operation upon disposition; and, the conclusion of an anticipated private debt financing on terms contemplated by the Company.
The Company assumes no obligation to update forward-looking statements as circumstances change. Investors are advised, however, to consult any further disclosures the Company makes on related subjects in the Company's 10-K, 10-Q and 8-K reports.
West Pharmaceutical Services, Inc.