Advanced Neuromodulation (NASDAQ:ANSI)
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St. Jude Medical, Inc. (NYSE:STJ) and Advanced
Neuromodulation Systems, Inc. (NASDAQ:ANSI):
-- Conference Call and Webcast for Investors and Analysts
Scheduled for Tomorrow at 7:00 a.m. Central Time (8:00 a.m.
Eastern Time)
-- St. Jude Medical Third Quarter 2005 Earnings Results to be
Issued Tomorrow
St. Jude Medical, Inc. (NYSE:STJ) and Advanced Neuromodulation
Systems, Inc. (NASDAQ:ANSI) announced today that the Boards of
Directors of both companies have unanimously approved a definitive
agreement whereby St. Jude Medical will acquire ANS for $61.25 per ANS
share in cash, for a total of approximately $1.3 billion.
Under the terms of the agreement, St. Jude Medical will commence a
tender offer for all of the outstanding shares of ANS common stock no
later than Tuesday, October 25, 2005. Following successful completion
of the tender, holders of any remaining outstanding shares of ANS will
be entitled to receive cash of $61.25 per share of ANS common stock
upon the closing of the merger.
The transaction is subject to customary closing conditions and
regulatory approvals, as well as the valid tender of a majority of the
outstanding shares of ANS common stock, on a fully-diluted basis. St.
Jude Medical expects the transaction to close by the end of the year.
ANS is a technology leader in the estimated $1 billion
neuromodulation medical device market and holds a strong No. 2 market
share position in the spinal cord stimulation segment. Neuromodulation
is the delivery of very small, precise doses of electricity or drugs
directly to nerve sites and is aimed at treating patients suffering
from chronic pain or other disabling nervous system disorders. ANS
also has clinical trials underway for new indications to address the
expanding markets for Parkinson's disease and essential tremor. The
neuromodulation market has experienced historical growth of over 20
percent during the last several years with continued robust growth
expected.
"This is a compelling strategic opportunity for St. Jude Medical
and is consistent with our efforts to create additional long-term
growth drivers that diversify our business mix and deliver value to
our shareholders while benefiting patients and physicians around the
world," said St. Jude Medical Chairman, President and Chief Executive
Officer Daniel J. Starks. "We have long respected the ANS team and
what they have accomplished. The ANS culture and dedication to
improving the quality of lives for patients are aligned with our own.
We welcome ANS's employees to St. Jude Medical and expect them to be
an important part of our continued success."
"In addition to providing ANS shareholders with good value, this
transaction will strengthen our competitive position on a global
basis," said Chris Chavez, President and Chief Executive Officer of
ANS. "We are pleased to be joining St. Jude Medical, a leader in
cardiac medical device technology. Both St. Jude Medical and ANS share
a common commitment to technological innovation and exceptional
service to our clinical and patient communities. We look forward to
becoming part of the St. Jude Medical team."
Following the close of the transaction, ANS will become a newly
created division of St. Jude Medical. Mr. Chavez and the executive
management team are expected to remain with the combined company and
Mr. Chavez will be President of the ANS Division. ANS will remain
headquartered in Plano, Texas.
Strategic Benefits of the Transaction
Provides Complementary Growth Platform for St. Jude Medical. The
acquisition of ANS is a natural expansion of St. Jude Medical's
implantable microelectronics technology programs. With ANS, St. Jude
Medical will gain an immediate footprint in the neuromodulation
segment of the medical device industry. ANS also has exciting new
applications under development that can leverage St. Jude Medical's
extensive experience in low-voltage stimulation design and
manufacturing.
St. Jude Medical expects to accelerate the flow of new and
innovative products in cardiac rhythm management and in
neuromodulation by using the research and engineering expertise of
both companies, as well as St. Jude Medical's manufacturing resources.
Brings Broad Product Portfolio. Today, ANS offers a full array of
implantable spinal cord stimulation (SCS) devices, including
rechargeable implantable pulse generators (IPGs), conventional battery
powered IPGs and radio frequency stimulators. ANS also offers a wide
range of lead systems and device programmers targeted toward
clinicians and patients. The recent introduction of the Eon(TM)
Neurostimulation System, ANS's rechargeable IPG, has been well
received in the market.
Strengthened International Presence for ANS. By capitalizing on
St. Jude Medical's international infrastructure, including its
distribution, regulatory and clinical functions, St. Jude Medical can
further strengthen ANS's global presence and growth. Today,
approximately 40 percent of St. Jude Medical revenues come from sales
outside the U.S., while less than 10 percent of ANS revenues come from
international sales. ANS products are currently sold in about 30
countries while St. Jude Medical has a presence in over 130 countries.
Offers Access to New Indication Opportunities. St. Jude Medical
expects to invest in ANS's growth opportunities through focused
development of new potential indications. ANS has received U.S. Food
and Drug Administration (FDA) approval for clinical studies in
indications such as Parkinson's disease and essential tremor --
diseases which represent potential new and underserved markets. ANS
also is exploring a number of additional therapeutic areas such as
migraine headaches, depression, obsessive compulsive disorder, obesity
and angina that provide exciting upside opportunities for revenue
growth.
Financial Benefits of the Transaction
Revenue Growth. St. Jude Medical's revenue growth will be enhanced
as a result of its combination with ANS. Including the additional
revenue provided from the ANS transaction in 2006, St. Jude Medical
now expects revenue growth of more than 20 percent next year.
Earnings Growth. Due to the strength of St. Jude Medical's current
business, the Company expects to absorb the acquisition of ANS and
still meet current earnings per share growth expectations for 2006.
The transaction is expected to be accretive to earnings per share in
2007 and beyond. St. Jude Medical is today reaffirming its goal of a
minimum 15 percent per year growth in earnings per share.
Capital Structure
St. Jude Medical intends to fund the transaction through cash on
hand and borrowings under an existing commercial paper program, which
is supported by bank credit facilities. St. Jude Medical anticipates
that the strong operating cash flow of the combined entities will
provide for the repayment of the acquisition-related debt by mid-2007.
Advisors
In connection with the transaction, Banc of America Securities LLC
is acting as financial advisor to St. Jude Medical, and Gibson, Dunn &
Crutcher LLP is legal counsel. Piper Jaffray & Co. is acting as
financial advisor to ANS, and Baker Botts L.L.P. is legal counsel.
Conference Call and Webcast at 7:00 a.m. (CDT) Tomorrow
St. Jude Medical and ANS will host a conference call and webcast
for investors and analysts at 7:00 a.m. CDT (8:00 a.m. EDT) on Monday,
October 17, 2005, to discuss today's announcement.
Additionally, St. Jude Medical's third quarter 2005 earnings
results, previously scheduled for Wednesday, October 19, 2005, will be
released tomorrow at 6:00 a.m. CDT and will be discussed on the 7:00
a.m. CDT conference call and webcast.
The call may be accessed at 866-425-6195 (U.S.) and 973-582-2700
(outside of the U.S.). The conference ID number is 6614858. The call
will also be simultaneously webcast at www.sjm.com.
Following the call, an audio replay will be available for seven
days by dialing 877-519-4471 (U.S.) and 973-341-3080 (outside of the
U.S.), conference code 6614858.
About St. Jude Medical
St. Jude Medical, Inc. (www.sjm.com) is dedicated to the design,
manufacture and distribution of innovative medical devices of the
highest quality, offering physicians, patients and payers outstanding
clinical performance and demonstrated economic value.
About ANS
ANS (www.ANS-medical.com) designs, develops, manufactures and
markets implantable systems used to manage chronic intractable pain
and other disorders of the central nervous system.
Forward-Looking Statements
Any statements made regarding the proposed transaction between St.
Jude Medical, Inc. and Advanced Neuromodulation Systems, Inc., the
expected timetable for completing the transaction, successful
integration of the business, benefits of the transaction, potential
clinical success, regulatory approvals, anticipated future product
launches, revenues, earnings, expected repayment of debt, market
shares, market growth, market segment growth, new indications, and any
other statements regarding St. Jude Medical's or ANS's future
expectations, beliefs, goals or prospects are forward-looking
statements which are subject to risks and uncertainties, such as those
described under or incorporated by reference in Item 8.01 of St. Jude
Medical's Current Report on Form 8-K filed on October 17, 2005, and in
Item 8.01 of ANS' Current Report on Form 8-K filed on October 17,
2005, and in the Outlook and Uncertainties section in ANS's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2005 (see page 25)
and ANS's Annual Report on Form 10-K for the year ended December 31,
2004 (see page 26). Actual results may differ materially from
anticipated results.
Additional Information
This announcement is neither an offer to purchase nor a
solicitation of an offer to sell shares of ANS. St. Jude Medical will
be filing a tender offer statement with the Securities and Exchange
Commission (SEC) and ANS will be filing a solicitation/recommendation
statement with respect to the offer. ANS shareholders are advised to
read the tender offer statement regarding the acquisition of ANS
referenced in this news release, and the related
solicitation/recommendation statement, when those statements are made
available to them. The tender offer statement and the
solicitation/recommendation statement will contain important
information that should be read carefully before any decision is made
with respect to the offer. These documents will be made available to
all shareholders of ANS at no expense to them. These documents will
also be available at no charge on the SEC's web site at www.sec.gov.
Shareholders may also obtain copies of these documents without charge
by requesting them from ANS, Inc. in writing at 6901 Preston Road,
Plano, Texas 75024, or by phone at 972-309-8000.