Closure Medical (NASDAQ:CLSR)
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Johnson & Johnson and CLOSURE Medical Corporation Announce
Acquisition Agreement
Acquisition to Strengthen Presence in Topical Adhesives and Surgical Sealants
NEW BRUNSWICK, N.J. and RALEIGH, N.C., March 4 /PRNewswire-FirstCall/ --
Johnson & Johnson (NYSE:JNJ) and CLOSURE Medical Corporation (NASDAQ:CLSR), a
global leader in biomaterial-based medical devices, today announced a
definitive agreement whereby CLOSURE Medical will be acquired in a cash-for-
stock exchange. CLOSURE Medical is expected to operate as a stand-alone entity
reporting through Ethicon, Inc., a Johnson & Johnson company, with whom CLOSURE
Medical has worked since 1996 on the development of topical adhesives.
Under the terms of the agreement, CLOSURE Medical shareholders will receive
$27.00 for each outstanding CLOSURE Medical share. The value of the
transaction as of the anticipated closing date is estimated to be approximately
$370 million based upon CLOSURE Medical's approximately 15.6 million fully
diluted shares outstanding, net of estimated cash on hand at time of closing.
Upon closing, Johnson & Johnson is expected to incur an estimated one-time
after-tax charge of approximately $68 million or $.02 per share, reflecting the
write-off of in-process research and development (IPR&D) charges. This
transaction does not affect Johnson & Johnson guidance (excluding IPR&D) as
reviewed at the year-end analyst meeting held on January 25, 2005.
The board of directors of CLOSURE Medical Corporation has approved the
transaction, which is subject to clearance under the Hart-Scott-Rodino
Antitrust Improvements Act and other customary closing conditions. The
agreement will require the approval of CLOSURE Medical's stockholders and is
expected to close during the second quarter of 2005.
CLOSURE Medical designs, develops and manufactures a number of medical
adhesives and delivery devices based on a proprietary medical-grade
cyanoacrylate technology for specific applications in wound care and wound
closure. This technology is found in the family of DERMABOND(R) Topical Skin
Adhesive (2-octyl cyanoacrylate) products, which are marketed by Ethicon, Inc.
under an exclusive distribution agreement. It is also found in BAND-AID(R)
Brand Liquid Bandage and other products for consumer and veterinary use.
CLOSURE Medical's cyanoacrylate formulations offer several advantages,
including speed, ease-of-use and performance, versus other products.
"This acquisition demonstrates Ethicon's commitment to further expand the
successful DERMABOND business and advances our efforts in topical adhesives and
surgical sealants," said Dennis N. Longstreet, Company Group Chairman for
Ethicon, Inc. "The capabilities and experience Ethicon expects to gain from
this transaction can significantly contribute to the company's sustained
success in these important segments."
Ethicon and CLOSURE Medical have both focused on further developing topical
adhesives. CLOSURE Medical's OMNEX(TM) Surgical Sealant recently received
European CE Mark approval for use as an adjunct to sutures to achieve
hemostasis in peripheral vascular surgery. Approval for a similar indication
in the U.S. is anticipated in 2006.
"CLOSURE Medical and Ethicon have enjoyed a partnership to provide better
health care and fulfill the unmet needs of patients and physicians around the
world," said Daniel A. Pelak, CLOSURE's President and Chief Executive Officer.
"We believe this acquisition will provide benefits to both our employees and
shareholders."
About Johnson & Johnson: Johnson & Johnson, with approximately 109,900
employees, is the world's most comprehensive and broadly based manufacturer of
health care products, as well as a provider of related services, for the
consumer, pharmaceutical, and medical devices and diagnostics markets. Johnson
& Johnson has more than 200 operating companies in 57 countries, selling
products throughout the world. For more information, visit http://www.jnj.com/
.
About Ethicon, Inc.: Ethicon, Inc. develops and markets products for surgery,
wound management and advanced wound care treatment. Products are marketed
through four divisions: ETHICON Products for precise wound closure and tissue
repair; CARDIOVATIONS for minimally invasive cardiac procedures; GYNECARE for
minimally invasive women's health procedures, and Johnson & Johnson Wound
Management for hemostasis and advanced wound care.
About CLOSURE Medical Corporation: CLOSURE Medical Corporation is a global
leader in the development and manufacture of innovative biomaterial-based
medical devices that fulfill the needs of healthcare practitioners, patients
and consumers.
This press release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. These statements are based
on current expectations, forecasts and assumptions that are subject to risks
and uncertainties, which could cause actual outcomes and results to differ
materially from these statements. Risks and uncertainties include the
satisfaction of the conditions to closing, including receipt of shareholder and
regulatory approval; general industry and market conditions; general domestic
and international economic conditions, such as interest rate and currency
exchange rate fluctuations; technological advances and patents attained by
competitors; challenges inherent in new product development, including
obtaining regulatory approvals; domestic and foreign health care reforms and
governmental laws and regulations affecting domestic and foreign operations;
and trends toward health care cost containment.
A further list and description of these risks, uncertainties and other factors
can be found in Exhibit 99(b) of Johnson & Johnson's Annual Report on Form 10-K
for the fiscal year ended December 28, 2003 and CLOSURE Medical's Annual Report
on Form 10-K for the year ended December 31, 2003. Copies of said Annual
Reports on Form 10-K are available online at http://www.sec.gov/ or on request
from the applicable company. Neither company assumes any obligation to update
any forward-looking statements as a result of new information or future events
or developments.)
Additional Information and Where to Find It:
This material is not a substitute for the proxy statement CLOSURE Medical will
file with the Securities and Exchange Commission. Investors are urged to read
the proxy statement, including detailed risk factors, when it becomes
available, because it will contain important information. The proxy statement
and other documents, which will be filed by CLOSURE Medical with the Securities
and Exchange Commission, will be available free of charge at the SEC's website,
http://www.sec.gov/, or by visiting CLOSURE Medical's website at
http://www.closuremed.com/ or the "Clients" section of the Allen & Caron
website at http://www.allencaron.com/ .
CLOSURE Medical and certain of its directors, executive officers and certain
other members of its management may be deemed to be soliciting proxies from
CLOSURE Medical's shareholders in connection with the proposed transaction.
Investors may obtain a detailed list of names, affiliations and interests of
CLOSURE Medical participants in the solicitation of proxies of CLOSURE
Medical's shareholders by reading the proxy statement when it becomes
available.
DATASOURCE: Johnson & Johnson
CONTACT: Johnson & Johnson, Media - Marc Monseau, +1-732-524-1130, or
Investors - Helen E. Short, +1-732-524-6491, Stan Panasewicz, +1-732-524-2524,
for Johnson & Johnson, or CLOSURE Medical, Investors - Benny Ward,
+1-919-876-7800; Allen & Caron Inc., Media - Len Hall, +1-949-474-4300, for
CLOSURE Medical
Web site: http://www.jnj.com/
http://www.closuremed.com/
Company News On-Call: http://www.prnewswire.com/comp/467347.html