A Medical Device Daily
Valley Forge Scientific (Oaks, Pennsylvania) and Synergetics (St. Charles, Missouri) reported entering into a stock-based merger agreement, thus providing, they said, “a greater presence in the medical device industry” and driving their expansion into markets they would not be able to achieve “as rapidly” on their own.
Gregg Scheller, president and CEO of Synergetics, said that the combination “will give us the ability to design, develop and manufacture electronic-based products and instruments and sell those products directly into the market.”
He said that Valley Forge’s products and brand name “will benefit substantially under the domestic and international distribution network that Synergetics has built over the last 13 years. The merger will also give the combined company the ability to develop new products, utilizing Valley Forge’s depth of knowledge in electronics and bipolar electrosurgery and Synergetics’ knowledge in disposable technology.”
Jerry Malis, CEO and chairman of Valley Forge, praised Synergetics’ management team and its “established presence in the retina surgery and neurosurgery markets, as well as other microsurgery markets for medical instrument sales. The company also has developed a sales and distribution network, which we are confident will thrive with Valley Forge’s product line.”
Synergetics’ shareholders will receive about 16 million shares of Valley Forge common stock, and the former shareholders will represent around 66% of Valley Forge’s outstanding common stock. The closing price of Valley Forge’s common stock on April 29 was $1.90 a share.
For the fiscal year ended Sept. 30, 2004, Valley Forge had revenues of about $4.8 million; for the fiscal year ended July 31, 2004, Synergetics had revenues of around $16.9 million.
Shareholders of Valley Forge, holding about 35% of its outstanding shares, and shareholders of Synergetics holding about 19% of its shares, have agreed to vote approval for the merger, and the companies’ boards have approved the deal, expected to close in the third quarter.
The new company will be led by a management team consisting of Scheller as president and CEO; Malis as executive vice president and chief scientific officer; and Kurt Gampp Jr., currently executive vice president and chief operating officer of Synergetics, in those same roles with the combined company.
The combined company’s board will be composed of seven directors, including two current directors of Synergetics and Valley Forge and three additional independent directors.
Synergetics manufactures durable and disposable instruments for use in retina surgery, neurosurgery and other microsurgery markets, with sales in more than 60 countries. It also manufactures disposables for the Sonopet OMNI Surgical Aspirator in neurosurgery.
Valley Forge manufactures bipolar electrosurgical systems and instrumentation, based on its DualWave technology, enabling the cutting and coagulation of tissue in the brain and spinal cord. The company’s bipolar electrosurgery systems are based on technology developed in conjunction with Leonard Malis, MD, professor and chairman emeritus of the Mount Sinai School of Medicine (New York) department of neurosurgery.
In other dealmaking, Closure Medical (Raleigh, North Carolina) reported that the Federal Trade Commission has granted early termination of the Hart-Scott-Rodino waiting period for its previously disclosed acquisition by Johnson & Johnson (J&J; New Brunswick, New Jersey) (Medical Device Daily, March 7, 2005).
In the deal – which expands the healthcare titan’s franchise in medical adhesives – J&J will pay Closure shareholders $27 for each Closure share held, with the total purchase valued at about $370 million.
Closure said the deal will close “as promptly as possible” after its special meeting of stockholders, set for June 2.
Closure makes biomaterial-based medical devices.