Medical Device Dailys
Suddenly the sun was shining in financial markets for the German healthcare company, Fresenius (Bad Homburg), which attracted more than $5 billion for a junk bond offered in early January that sought $650 million, reported to be the first issue of its kind in 18 months.
The company quickly increased its offer to $800 million and said one week later the financing was over-subscribed.
The financing will be used to replace a bridge loan used to finance the acquisition of APP Pharmaceuticals (Schaumburg, Germany) to repay other debt and for general corporate purposes.
The company said the transaction will complete the financing of the APP Pharmaceuticals acquisition (Medical Device Daily, July 9, 2008).
The unsecured senior notes were issued in separate tranches for €275 million ($361 million) with a yield to maturity of 10.25 %, and $500 million with a coupon of resulting in a yield to maturity of 10.5%. J.P. Morgan led the U.S. offering, while Deutsche Bank led the simultaneous offering in Europe.
The upgrading of a high-yield bond was warmly welcomed by traders in London, according to Reuters, which cautioned that investors are not expecting a flood of other high-yield bond issues to follow in the footsteps of Fresenius.
"The market will be extremely discerning," Robin Creswell, managing principal at Payden & Rygel Global (London), told Reuters.
"This isn't a gate opening, saying that the high-yield market is now open for business," he said.
The European junk bond market all but closed in July, 2007 in the early stages of the current financial crisis, according to Bloomberg, which noted the Fresenius bond offer is the biggest since that date for sub-investment grade debt.
"People know this company well and it's at the top of the high-yield spectrum. It's also healthcare, which is relatively non-cyclical," James Gledhill, head of fixed income at New Star Asset Management (London), told Reuters.
Fresenius is the world's largest provider of kidney dialysis services with more than 121,000 employees, most based in the U.S.
At the end of 3Q08, Fresnius reported sales of €8.8 billion ($11.5 billion), up 11% in constant currency, with adjusted net income up 14% in constant currency at €324 million ($425.5 million). The company will report 2008 results in February.
CE mark for spinal products
K2M (Leesburg, Virginia) has introduced the newly CE-marked Potomac Rod System in Europe and other international markets where the CE mark is recognized.
The company said the new product, in concert with its Serengeti Minimally Invasive Retractor System, represent "a revolutionary minimally invasive approach to dynamic fixation of the spine."
The two systems have been cleared for international distribution, which K2M said would expand its global presence.
President/CEO Eric Major said, "CE-mark clearance for these next-generation products expands the K2M product offering and fuels our rapid growth into the global markets, helping to position K2M as a leader for developing solutions to help surgeons address the most complex spinal pathologies."
The Potomac Rod System provides what the company calls "a simple and versatile one-piece rod design to enhance the stabilization characteristics of the spine."
K2M said it has secured exclusive rights to a unique manufacturing process of the material properties of nitinol, a shape memory alloy.
"The intrinsic elasticity of the rod provides stabilization of the spine, while potentially reducing problems typically associated with traditional fusion materials," the company said. "The simplistic design allows Potomac to be implanted using traditional surgical techniques or by using the innovative Serengeti Minimally Invasive Retractor System."
The Serengeti system, which was introduced in 2007, offers a novel approach for the insertion of spinal implants through very small incisions. "This percutaneous approach has been designed to provide improved visualization and access for multi-level complex posterior instrumentation procedures," K2M said in a statement.
Siemens, SVOX in deal
SVOX (Zurich, Switzerland), a provider of embedded speech solutions, reported the acquisition of the Professional Speech Processing Group of Siemens (Munich, Germany).
The Swiss company has acquired all of the speech technology-related intellectual property of Siemens developed over 25 years, including the SpeechAdvance speech recognition product suite and more than 60 patent families.
SVOX CEO Volker Jantzen said the majority of the Professional Speech Processing Group's employees will be integrated into SVOX Deutschland GmbH in Munich, a fully owned subsidiary of SVOX.
"In the past SVOX has only been providing technology for making cars and portable devices talk to you," Jantzen said. "As a result of this deal, we are now able to make those devices also understand what you are saying. A real dialog between you and the machine is therefore now possible – all from SVOX. We will continue to innovate to enable natural and intuitive communication between humans and machines."
As a result of the acquisition SVOX said it will immediately offer its own Automatic Speech Recognition products as well as complete speech dialogue solutions. The deal allows SVOX to significantly reinforce its position in embedded speech solutions for the automotive and mobile phone industry and strengthen its technology leadership. The enlarged company will have a commanding market share in speech solutions for premium cars.
Siemens is a global powerhouse in electronics and electrical engineering, with major operations operating in the healthcare, industrial and energy sectors.