Getinge creates new platform for long-term growth
Getinge AB has today announced an offer for all of the outstanding share capital of the publicly listed UK medical technological company Huntleigh Technology PLC (Huntleigh). The offer amounts to 480 pence in cash per Huntleigh share, which corresponds to an offer premium of 28 per cent, compared with yesterday’s closing price. The total value of the offer will be GBP 409 M (SEK 5,476 M [1]). The offer has been unanimously recommended by the Board of Huntleigh who, together with the principal owner of Huntleigh, the Schild family, and certain other shareholders cumulatively representing 46.2 per cent of the issued share capital, have irrevocably undertaken to accept the offer from Getinge AB. These irrevocable undertakings will remain binding in all circumstances, including in the case of any competing offer. In addition, we have received letters from certain institutional shareholders cumulatively representing 17.4 per cent of the issued share capital stating their intent to accept the offer.
About Huntleigh
The Huntleigh Group operates within the areas of special mattresses for the treatment of pressure ulcers, beds for use in intensive care, specialist care and nursing homes, IPC products (Intermittent Pneumatic Compression) for the prevention of deep vein thrombosis, and equipment for foetal and vascular diagnosis.
The Group has a strong market organisation with 20 proprietary sales companies. The products are distributed in 120 markets and have very strong market positions. Within wound care mattresses, the company is number one in Europe and globally in each individual market outside the US. Within healthcare beds, it is number two in Europe and within IPC products, it is number one globally. Within the Diagnostics market sector, it has strong niche positions. Huntleigh’s primary customer group is hospitals.
In the year ended 31 December 2005, Huntleigh had sales of GBP 200 M (SEK 2,675 M) and profit before tax of GBP 22.2 M (SEK 297 M). On June 30, 2006, the Group had assets amounting to GBP 179 M (SEK 2,394 M) shareholders’ equity of GBP 102 (SEK 1,364 M). and over 2,600 employees.
Improved profitability and growth
Subsequent to the completion of the acquisition, Huntleigh will be integrated into Getinge’s Extended Care business area, thereby creating a globally leading player within patient handling, wound care and hygiene, with combined sales of approximately SEK 6 billion and over 4,400 employees. Huntleigh will be a perfect complement to Extended Care in terms of overlapping geographical presence and supplementary sales channels and products. The main strategic reasons for the transaction are:
1. Opportunity for additional sales through the combined sales channels of Huntleigh and Extended Care: Huntleigh’s primary customer group is hospitals and Extended Care’s is nursing homes. Access to both sales channels will result in increased sales.
2. The formation of critical mass in service and sales: the increase in sales and service personnel that the merger will generate in overlapping markets will increase market penetration. Following the merger, the business area will boast a very competitive market organisation with approximately 1,600 dedicated sales representatives and service technicians.
3. Availability of efficiency synergies within administration, production, technical services, purchasing and logistics.
4. A substantial improvement in Extended Care’s weak market position within wound care; from being a niche supplier of wound care mattresses, with corresponding limitations, to achieving a leading position in Europe and globally, in each individual market outside the US.
5. The possibilities for future system innovations within patient care: an increasing amount of care takes place at the bedside. Through “Total Bedside Management” – system integration of patient lifters, beds and information technology, Extended Care’s aim is to offer equipment for more efficient care in the future.
Johan Malmquist, President and CEO of Getinge said: “By combining both Groups, we can offer the combined customer base a broader product portfolio and a better service offering. Extended Care’s business philosophy, to reduce care costs by increasing care quality and efficiency, is well in line with Huntleigh’s. The synergies between Extended Care and Huntleigh in terms of geography, products and sales channels are highly attractive. It is our goal to immediately implement integration in order to take advantage of the possibilities created by the merger. I look forward to welcoming Huntleigh’s management and employees, whom we consider to be very important to the future success of the business, into the Getinge Group.”
Julian Schild, Huntleigh’s Chairman of the Board, agrees: “We are convinced that both our customers and employees will benefit from the merging of both companies. We welcome Getinge’s positive opinion that Huntleigh’s management and employees will play an important role in the future success of the merged group.”
The offer in brief
• Huntleigh’s Board and management have recommended that Huntleigh’s shareholders accept Getinge’s cash offer at a price of 480 pence per share, representing a premium of 28 per cent on yesterday’s closing price.
• Payment is intended to be made entirely in cash.
• Getinge has received irrevocable undertakings to accept the offer from Huntleigh shareholders controlling 46.2 per cent of Huntleigh’s current issued share capital, as well as letters of intent from certain institutional shareholders representing 17.4 per cent of the current issued share capital.
• Getinge’s offer will be unconditional if shareholders whose holdings amount to more than 50 per cent of Huntleigh’s shares accept the offer and the other conditions are fulfilled.
• Financing of the acquisition is secured through a loan agreement between Getinge and Nordea Bank AB (publ).
• Getinge is being advised by UBS.
The offer is conducted in compliance with the United Kingdom “City Code on Takeovers and Mergers”, which, inter alia, regulates the amount of information that may be disclosed in conjunction with the transaction. The offer includes condition customary to public offers in the UK. Further information, including the complete conditions of the offer, can be found in the UK press release pertaining to the public offer, which is released today (see www.getinge.com/prdisclaimer.html) as well as the formal offer document which is to be distributed to Huntleigh’s shareholders today.
Timetable
Provided the offer is accepted by Huntleigh’s shareholders in accordance with the terms and conditions in Getinge’s offer, the transaction is expected to be completed in January 2007.
Press conference
A press conference is scheduled to take place at Hilton Stockholm Slussen hotel, Stockholm today at 10.00 CET. A telephone conference has also been scheduled to take place today at 14.00 CET. To participate, please call:
from Sweden 08-5052 0114, password: GETINGE
from outside Sweden +44 (0)20 7162 0125, password: GETINGE
A recorded version of the conference will be available for five working days on the following numbers:
Sweden +46 (0) 850520333, access code: 731211
UK: +44 (0)20 7031 4064, access code: 731211
Getinge, December 8, 2006
Johan Malmquist
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[1] The exchange rate used in this press release is that applying on 7 December 2006, meaning GBP 1 = 13,375 SEK