Mathys Medizinaltechnik AG and Synthes-Stratec Inc., Agree to Combine, Forming a Global Osteosynthesis Medical Device Company
Bettlach and Oberdorf/Switzerland, August 13, 2003
Mathys Medizinaltechnik AG (Mathys) and Synthes-Stratec Inc. (Synthes-Stratec) announced today an agreement to combine the two companies to create a global osteosynthesis medical device company.
To effect the transaction, Synthes-Stratec is purchasing all Mathys shares for CHF 1 billion in cash and CHF 500 million in Synthes-Stratec equity, issuing 510’725 shares. The cash portion of the transaction will be financed with cash on hand plus bank borrowings. Upon consummation of the transaction the company will have net debt (debt less cash) of approximately CHF 610 million. Credit Suisse First Boston (CSFB) is arranging the required acquisition financing. The transaction, for which a fairness opinion has been provided by CSFB, is expected to be accretive to earnings per share in the first year of combined operations.
Mathys, a family-owned company, has worked closely with the AO/ASIF Foundation (Arbeits-gemeinschaft für Osteosynthese/Association for the study of internal fixation) since 1958, and is comprised of osteosynthesis and prosthetics businesses, with over 1800 employees. In 2002 the osteosynthesis business contributed CHF 383 million in revenues to Mathys. The company designs, manufactures, and markets instruments and implants for trauma, spine, craniomaxillofacial and orthopedic surgeons. Mathys’ prosthetics business will not be part of the combination. Before closing, the Mathys family will transfer all prosthetic operations into an independent company under the name Mathys Ltd. Bettlach. and the Dr. h.c. Robert Mathys Foundation will remain an independent research and testing institution located in Bettlach.
Synthes-Stratec is a leading international medical device company, specializing in the development, manufacturing and marketing of osteosynthesis instruments and implants. Working closely with the AO/ASIF Foundation and with leading surgeons in hospitals all over the world, Synthes-Stratec develops the highest quality osteosynthesis products for surgeons in the specialties of orthopedic trauma, spine, craniomaxillofacial, and veterinary surgery. The company employs over 4,100 people, with headquarters in Paoli, Pennsylvania and in Oberdorf, Switzerland.
The AO/ASIF Foundation, located in Davos, Switzerland, is the preeminent organization dedicated to providing state-of-the-art treatment for fractures and spine diseases for patients worldwide through training, education and research.
Mathys and Synthes-Stratec have each developed close alliances with leading surgeons, university and hospital personnel throughout the world. The combination of Mathys and Synthes-Stratec will strengthen and improve their relationships with the AO/ASIF, will allow for more efficient worldwide product development and manufacturing activities and provide continued market presence.
Both Mathys and Synthes-Stratec believe that the combined global Synthes® company will result in the leading worldwide osteosynthesis company, optimally positioned to drive future innovation and market growth. The locations in Bettlach and Oberdorf will continue to play important roles in the new growing organization.
Robert Mathys, Jr., Chairman and CEO of Mathys, states: “We offer a sound, strong, growing business, whose focus in Europe and Asia-Pacific will greatly complement the existing Synthes-Stratec business in the rest of the world.”
Hansjörg Wyss, Chairman and CEO of Synthes-Stratec, welcomes the Osteosynthesis organization of Mathys into Synthes-Stratec, noting that, “I am totally convinced that the new global Synthes® will significantly strengthen its worldwide leadership in osteosynthesis to the benefit of our employees, the AO-ASIF Foundation, and surgeons and patients worldwide.”
The transaction is subject to approval of regulatory authorities. In addition, the issuance of the shares related to the transaction is subject to approval by the Synthes-Stratec shareholders at an extraordinary general meeting. The transaction is expected to close prior to year-end.
For further information please contact
Peter Fehlmann, Investor Relations, Synthes-Stratec, Inc.
Phone: +41 61 965 63 39, Fax: +41 61 965 66 06
e-mail: ir.info@synthes.com
Regula Haag, Public Relations, Mathys Medical Ltd.
Phone: +41 32 644 14 97, Fax: +41 32 644 11 86
e-mail: regula.haag@mathysmedical.com