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Intermagnetics to Divest Polycold Subsidiary to Focus on
Expanding Medical Devices Business
* Helix Technology to Buy Business for $49.2 Million in Cash at Closing, Plus
Assumption of Post-Close Tax Obligation
LATHAM, N.Y., Dec. 16 /PRNewswire-FirstCall/ -- Intermagnetics General
Corporation (NASDAQ:IMGC) today announced that it has signed a definitive
agreement to sell its Polycold Systems subsidiary to Helix Technology
Corporation (NASDAQ:HELX) for $49.2 million in cash at closing plus the
assumption of a post-close tax obligation of about $3.3 million. The
transaction, approved by both companies' boards of directors, is subject to
customary closing conditions, including regulatory approval and is scheduled to
close in mid-February 2005.
"Polycold has been a very positive contributor to Intermagnetics' growth in
revenue, earnings and cash flow over the past couple of years," said Glenn H.
Epstein, chairman and chief executive officer of Intermagnetics. "However, we
believe that our shareholders' long-term interests are best served by focusing
our resources on our expanded and growing medical devices business. We have
strengthened our position in the medical devices marketplace with our
acquisitions of Invivo and MRI Devices during 2004. The proceeds from the
Polycold sale will enable us to substantially reduce debt associated with those
acquisitions and will provide even broader flexibility in considering other
strategic initiatives to further grow Intermagnetics.
"We are confident that Polycold and its customers will benefit from Helix's
expertise in vacuum technology and its well-known reputation within this
market," Epstein said. "Polycold is having an outstanding year and is well
positioned for continued growth. As we have demonstrated in the past, we take
great pride in placing our divested operations with strategic buyers that value
not only the physical assets, but the people that have made the business
successful. We believe that this transaction is in everyone's best interests,
including the customers, employees and shareholders of both Intermagnetics and
Helix."
Michael Burke, chief financial officer of Intermagnetics, said: "Using the
proceeds of this sale to substantially reduce our bank debt further strengthens
our balance sheet and provides us increased financial flexibility to pursue
incremental growth opportunities. We anticipate that the Polycold sale will
result in a large gain -- in excess of $30 million pre-tax, or about $0.70 EPS
-- depending on final adjustments to our cost basis and associated closing
expenses." Burke said the total transaction value of nearly $53 million will
consist of $49.2 million to be paid in cash at closing followed by a subsequent
payment by Helix of up to a maximum of $3.3 million to reimburse Intermagnetics
for certain tax obligations.
Burke also reaffirmed the company's previously issued guidance for second
quarter revenue and earnings. Results are scheduled to be released post-market
on December 20, 2004. "The anticipated effect of the transaction on our full-
year reported EPS-ending May 29 2005-is clearly going to be beneficial," Burke
continued. "From an ongoing operational perspective, we expect to subtract a
little more than one quarter's worth of Polycold's revenue, earnings and cash
flow from our consolidated results. We anticipate that the overall impact to
prior guidance for FY 2005 operating earnings and EBITDA will be quite modest
as we plan to apply the sale proceeds to substantially reduce our debt
servicing costs. Further details will be provided when the transaction is
closed."
Following the sale of Polycold, Intermagnetics will consist of four businesses:
the Magnet Business Group, which designs, manufactures and sells
superconducting magnets for magnetic resonance imaging (MRI) systems; Invivo
Diagnostic Imaging, which designs, manufactures and sells radio frequency (RF)
coils and related sub-systems used by MRI systems; Invivo Patient Care, which
designs, manufactures and sells patient monitoring systems; and SuperPower,
Inc., which is developing second-generation, high-temperature superconducting
(HTS) materials and related devices designed to enhance capacity, reliability
and quality of transmission and distribution of electrical power.
A conference call to discuss Q2 results and the Polycold transaction is
scheduled for Tuesday, December 21st beginning at 11a.m. EST. The call will be
broadcast live and archived over the Internet through the company's web site
http://www.intermagnetics.com/ under the Investor Relations section. The
domestic dial-in number for the live call is (877) 407-8037. The international
dial-in number is (201) 689-8037. No conference code is required for the live
call.
Intermagnetics (http://www.intermagnetics.com/ ) draws on the financial
strength, operational excellence and technical leadership in its expanding
businesses within Medical Devices that encompass Magnetic Resonance Imaging
(MRI) Magnet Systems, Invivo Diagnostic Imaging (focusing on MRI components and
imaging sub-systems) and Invivo Patient Care (focusing on monitoring and other
patient care devices). Intermagnetics is also a key supplier to the markets
within Instrumentation and has become a prominent participant in
superconducting applications for Energy Technology. The company has a more than
30-year history as a successful developer, manufacturer and marketer of
superconducting materials, high-field magnets, medical systems & components and
other specialized high-value added devices.
Safe Harbor Statement: The statements contained in this press release that are
not historical fact are "forward-looking statements" which involve various
important assumptions, risks, uncertainties and other factors. These forward-
looking statements are based on currently available competitive, financial and
economic data and management's views and assumptions regarding future events.
Such forward-looking statements are inherently uncertain. Intermagnetics cannot
provide assurances that the disposition of the business will be completed due
to certain risks and uncertainties, including but not limited to: possible
future legal proceedings; the parties' ability to meet closing requirements
including all conditions precedent. Other risks and uncertainties include the
company's ability to meet the performance, quality and price requirements of
our customers and maintain gross margin levels through continued production
cost reductions and manufacturing efficiencies; the ability of the company's
largest customer to maintain and grow its share of the market for MRI systems;
the company's ability to successfully integrate recent acquisitions; and the
company's ability to invest sufficient resources in and obtain third-party
funding for its HTS development efforts and avoid the potentially adverse
impact of competitive emerging patents, as well as other risks and
uncertainties set forth herein and in the company's Annual Report on Forms 10-K
and 10-Q. Except for the company's continuing obligation to disclose material
information under federal securities law, the company is not obligated to
update its forward-looking statements even though situations may change in the
future. The company qualifies all of its forward-looking statements by these
cautionary statements.
DATASOURCE: Intermagnetics General Corporation
CONTACT: Glenn Epstein, Chairman & CEO, or Cathy Yudzevich,
IR Manager, +1-518-782-1122, both of Intermagnetics General Corporation
Web site: http://www.intermagnetics.com/