05 January 11 The Business Times
MAINBOARD-listed LMA International, a major provider of supraglottic airway management devices, said it has finalised the acquisition, through its subsidiary LMA North America Inc (LMANA), of US-based Wolfe Tory Medical Inc (WTM).
The completion follows LMA's announcement last month that it was in advanced negotiations to acquire the Utah-based manufacturer and distributor of medical devices.
The purchase price is US$13.1 million, plus additional deferred payments based on the 2012 trailing sales of two new innovative products that will be introduced in 2011.
Under the terms of the agreement, LMANA will acquire the business relating to WTM, including the product line relating to the mucosal atomisation devices and intra-abdominal pressure monitoring devices which have become leaders in their market segments with strong brand recognition, said LMA.
Group chairman Trevor Swete said that the acquisition is synergistic and aligned to LMA's growth strategy. The firm is focused on enhancing the depth of its portfolio of innovative and market-leading core airway and anaesthesia products, distributed through existing sales channels, as opposed to exploring new categories.
In the past few years, LMA said it has sold WTM's products successfully in Australia, New Zealand, Germany and Italy.
The newly acquired products will now be distributed through LMA's US subsidiary, LMANA. The products will also be sold through LMA's international distributor network that reaches over 100 countries.
Said William Crothers, group CEO: 'In recent years, we have achieved excellent results selling these products. They complement our product portfolio and we believe we can grow sales further as part of a strengthened product suite.'
WTM is profitable and in the first year post-acquisition, the transaction is anticipated to be accretive to LMA's Ebitda (earnings before interest, taxes, depreciation and amortisation). The additional amortisation of acquired intangible assets will reduce the net income benefit of the transaction to a broadly neutral impact on earnings in year one, but will add to earnings per share in the second year.
The book value of the net tangible assets being acquired is about US$1.4 million, subject to finalisation of the balance sheet of the business as at Dec 30, 2010, said LMA. No open market valuation of the assets being acquired has been obtained.
The net profit attributable to WTM, which is being acquired, was approximately US$1.3 million, based on extracts from management accounts, for the nine months ended Sep 30, 2010.