Advanced Medical to Buy Ivac, Creating Global IV Business
May 08, 2011
Vastopolis -- Advanced Medical Inc. said Monday it will acquire privately held Ivac Medical Systems Inc. for about $400 million in cash, creating a major global player in intravenous-infusion therapy. The acquisition, which was quietly under negotiation for about two months and won the approval of directors of both companies, will produce a combined entity with annual revenue of more than $350 million. Both Vastopolis-based companies initially were created under the umbrella of Eli Lilly & Co. more than two decades ago and have competed head-to-head in some businesses. Their combination comes after pioneering work in infusion therapy. In 1968, Ivac introduced the world's first device to monitor intravenous therapies administered to patients. Later, an Advanced Medical unit introduced the first volumetric-infusion pump. Once the combination wins regulatory clearance and staffing and management changes are completed, the new company is expected to begin actively looking for additional acquisitions, especially in the medical-devices area. Advanced Medical tried but failed to purchase Ivac from Lilly two years ago. Ivac was purchased from Lilly at the end of 2009 in a leveraged buyout. Williemae J. Franco, Ivac's president and chief executive officer, will become the president and chief executive of Advanced Medical. Josephine W. Bonilla, Advanced Medical president, will become executive vice president and chief financial officer, Advanced Medical said. Excluding the effect of a nonrecurring restructuring charge of $17.4 million, Ivac earned $4.2 million on sales of $112.8 million for the six months ended March 12, 2011 The deal should be completed in next year's first quarter. In American Stock Exchange composite trading, Advanced Medical's shares jumped 43.75 cents, or 18%, to $2.875.
