Beckman Announces Definitive Agreement to Acquire
the Coulter Corporation
05:07 a.m. Sep 02, 1997 Eastern
FULLERTON, Calif.--(BW HealthWire)--Sept. 2, 1997--Beckman
Instruments, Inc. (NYSE:BEC) announced today that it will
significantly
expand its presence in the diagnostics and life sciences
markets by
acquiring the privately held Coulter Corporation of Miami.
The combined companies will be called Beckman Coulter,
Inc., which
capitalizes on two of the strongest, most recognized global
franchises in
the diagnostics and life sciences markets.
Under the terms of a definitive agreement, Beckman will pay
$875
million in cash for all outstanding Coulter shares and
assume about
$175 million in debt. The transaction is subject to usual
closing
conditions and is expected to be completed in the fourth
quarter of
1997.
Beckman Coulter will recognize approximately $300 million
of
charges for integration and in-process research and
development. Also
in the fourth quarter, the company will record a purchase
liability and
assume approximately $100 million of pre-existing
extraordinary
obligations. A significant portion of the intangible assets
resulting from
the transaction is anticipated to be amortized over 40
years.
This acquisition will be modestly accretive to Beckman's
current
earnings per share plan in 1999. In subsequent years,
earnings per
share will accrete significantly. Beckman's anticipated
1997 fourth
quarter earnings per share will be diluted by $11.00 to
$12.00,
including special charges of about $10.00 per share. During
1998, the
first year of integration, earnings per share will be
diluted $1.00 to
$2.00.
Coulter was founded in 1958 by brothers Wallace and Joseph
Coulter, who are the inventors and developers of the
Coulter
Principle, a fundamental technology for particle sizing and
counting. The
application of this technology to the health care field has
been central to
Coulter's success and number one market position, with
sales in
hematology of more than twice that of the next largest
competitor.
Coulter is the leader in systems for blood and other cell
analysis, and
the company's product portfolio includes hematology systems
and
laboratory automation for diagnostic applications and flow
cytometers
for diagnostic and research use. Annual sales in 1996 were
$700
million, with more than half of these generated from
outside the United
States.
Coulter's capabilities are an important strategic addition
for Beckman,
particularly in the $19 billion in vitro diagnostics
market. With Coulter's
hematology systems, Beckman will be able to address more
than 75
percent of typical hospital laboratory test volume and
essentially all of
the tests that are considered routine.
In the near term, this broad-based capability will provide
competitive
differentiation and sales leverage with diagnostic
laboratories and group
purchasing organizations. In the longer term, it will allow
Beckman
Coulter to be an industry leader in the optimization of
laboratory
workflow by offering integrated testing capabilities
together with
automation options that can match a range of laboratory
test volumes.
Coulter also brings flow cytometry to Beckman's product
breadth.
This technology has use in analyzing blood, bone marrow and
tissue for
the study of cell function and cell defects. Flow cytometry
complements
Beckman's bioresearch as well as diagnostics businesses and
has
future applications in disease-state management.
The acquisition will initially be funded with proceeds from
a credit
agreement to be entered into with Citibank, who will serve
as arranger
and administrative agent. Subsequent to the closing,
Beckman Coulter
expects to refinance the acquisition debt with the sale of
certain financial
assets and real estate and the issuance of long-term debt.
Merrill Lynch,
who will participate in the financing as syndication agent,
advised
Beckman on the acquisition and provided a fairness opinion
to the
Board of Directors.
Going forward, Beckman Coulter expects to generate
significant cash
flow that will help to quickly reduce the debt incurred in
this transaction
and establish an investment grade debt rating by 1999. This
cash flow
will result from a predictable stream of aftermarket sales
which
represent about 70 percent of the combined companies'
revenues. The
aftermarket is driven by the sale of reagents, supplies and
service to
laboratories operating more than 75,000 systems around the
world.
Louis T. Rosso, chairman and chief executive officer, said,
"The
strategic benefit of this acquisition is of major
significance. We are
creating a $1.7 billion company with a formidable
combination of
technology, presence and product. Coulter is the market
leader in
blood cell analysis and its organization is renowned for
technical
innovation and customer service. At the same time, Beckman
is a
leader in clinical chemistry, immunochemistry and the life
sciences. The
combination will leverage these strong market positions and
open new
strategic pathways."
Focused on the chemistry of life, Beckman Instruments, Inc.
automates
and simplifies biological analysis with products used in
clinical
diagnostics and life science laboratories. Beckman's
instrument
systems, chemistries, software and supplies are used in all
phases of the
battle against disease, from pioneering medical research
and drug
discovery to patient blood testing. Operating on a global
basis,
Beckman's annual sales totaled more than $1 billion in
1996, with half
of these generated outside the United States.
Coulter Corporation is the world's leading manufacturer of
in vitro
diagnostic systems for blood cell analysis. A wholly owned,
privately
held family corporation, Coulter has a reputation as a
technology
leader in hematology and flow cytometry, with additional
businesses in
scientific instruments and laboratory automation.
This release contains forward-looking statements concerning
the impact
of this transaction on the company's future performance,
including
statements regarding a negative effect on earnings per
share in 1997
and 1998, and a positive effect on earnings per share
thereafter.
These statements involve risks and uncertainties that could
cause an
impact on the company's business that differs materially
from that
expressed in any of these forward-looking statements,
including the
following: difficulties, delays or failures to effectively
integrate
worldwide operations and/or complete the development phase
of
certain products, the amount and pacing of planned
synergies, world
economic impact on currency and interest rates, delays in
securing
regulatory approvals, and changes in government medical
reimbursement policies or programs.
CONFERENCE CALL
A conference call will be held on Tuesday, Sept. 2, 1997,
at 10:30 a.m.
E.D.T. Anyone wishing to participate should dial
212/346-6467 and
ask for the Beckman conference call or reservation 3104980.
A replay of this conference call will be available on
Tuesday, Sept. 2,
1997 beginning at 12:30 p.m. E.D.T., until 8 p.m. E.D.T.,
Thursday,
Sept. 4, by dialing 800/633-8284 and entering password
3104980.
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Copyright 1997, Business Wire