Asahi Kasei Buying ZOLL for $2.2B - Analyst Blog
13 Março 2012 - 8:45AM
Zacks
In a bid to beef up its health care
business, Tokyo-based leading chemical manufacturer Asahi Kasei has
agreed to take over Resuscitation devices maker ZOLL
Medical (ZOLL) in a deal worth roughly $2.21 billion. The
transaction, which has been cleared by the Boards of both
companies, is expected to consummate in second-quarter 2012.
ZOLL Medical is a leading player in
the global market for external defibrillators (worth more than $1
billion) and competes with Physio-Control, a wholly owned unit of
Medtronic (MDT), and Philips
(PHG).
The company makes the LifeVest
wearable defibrillator, a lightweight device which is worn outside
the body by patients at risk of sudden cardiac arrest (“SCA”). Its
sales soared 18% year over year to $133.7 million in the most
recent quarter on the heels of robust revenues from LifeVest,
backed by its Temperature Management business.
Per the deal, Asahi will make a
cash tender offer to buy the outstanding shares of ZOLL Medical for
$93 a share. The purchase consideration represents a 23.8% premium
over ZOLL’s closing price on March 9. The offer is expected to
begin within ten business days and will be open for at least twenty
business days.
Closing of the tender offer is
subject to customary conditions including appropriate regulatory
approvals and the minimum tender of at least two-thirds of ZOLL’s
outstanding shares. The company’s Board has recommended its
shareholders to accept the offer and tender their shares once the
offer is made.
Following the closure of the tender
offer, Asahi plans to implement a second-step merger, under which
the remaining ZOLL shares (not tendered) will be converted into the
rights to receive equivalent cash price per share as quoted in the
offer.
Pursuant to the completion of the
deal, ZOLL will become a fully-owned subsidiary of the Asahi Kasei
Group while retaining its existing management team and business
operations.
The agreement builds upon the
partnership between the two entities (inked in July 2011). The deal
provided Asahi with the exclusive distribution rights to ZOLL’s AED
PLUS automated external defibrillator (“AED”) in Japan (the world’s
second-largest external defibrillator market).
The acquisition will enable Asahi
to leverage ZOLL’s leadership in resuscitation technologies to
accomplish its long-term goal of creating a globally competitive
health care business with a unique focus on critical care. It
extends the development of the company’s “Health Care for Tomorrow”
project which focuses, among other things, on the resuscitation
sector in which ZOLL has a strong global presence.
Our Outperform recommendation on
ZOLL Medical is backed by a Zacks #2 Rank, which translates into a
short-term Buy rating.
MEDTRONIC (MDT): Free Stock Analysis Report
KONINKLIJKE PHL (PHG): Free Stock Analysis Report
ZOLL MEDICAL CO (ZOLL): Free Stock Analysis Report
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