McGaw Inc., an intravenous product and service company, willbecome the latest addition to holding company Ivax Corp.
McGaw shareholders will receive $16 worth of Ivax commonstock for each of their shares of McGaw stock. The exactamount of stock will be based on the closing price of Ivax(AMEX:IVX) over the 10 consecutive-trading-day period twodays prior to the acquisition announcement. McGaw'sapproximately 27.4 million outstanding shares of stock placethe price of the acquisition at about $440 million. Ivax ofMiami has about 72.2 million shares outstanding.
Irvine, Calif.-based McGaw's products include Excel intravenousdrug containers (non-PVC bags compatible with drugs thatcannot be administered through a typical PVC drip bag). Ivax isalso gaining McGaw's Duplex technology, which the companysaid allows the instantaneous mixing of drugs and IV solutions.McGaw's Central Admixture Pharmacy Services (CAPS)provides patient-specific admixture services for medicalcenters, home IV therapy providers, skilled nursing facilitiesand hospices.
The companies intend to consummate the stock-swap mergeras a tax-free reorganization and a pooling of interests foraccounting and financial reporting purposes. To qualify for sucha merger, the companies must obtain approval of theshareholders of both companies and of the Federal TradeCommission and the Department of Justice. They expect thetransaction to be completed in the first or second quarter of1994.
Ivax is a holding company with subsidiaries specializing inspecialty chemicals, medical diagnostics, pharmaceuticals,cosmetics and skin care.
McGaw was privately held until its initial public offering lastMarch, when the company's stock was sold at $8 per share --meaning that McGaw shareholders who bought into thecompany at the IPO will double their investment. The companywas originally part of Kendall McGaw, a subsidiary of Colgate,but became independent in 1990 when Baxter Healthcareacquired Kendall and was forced to divest McGaw.
The company reported gross revenues of $246 million for thenine months ending September 30, with net profits of $99.6million. Fourth quarter results are not yet available.
Ivax's stock closed Thursday at $28.25, up 13 cents.
-- Karl A. Thiel Associate Editor
(c) 1997 American Health Consultants. All rights reserved.