- Proxy Statement - Merger or Acquistion (definitive) (DEFM14A)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant   x                              Filed by a Party other than the Registrant   ¨

Check the appropriate box:

 

¨	Preliminary Proxy Statement
¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
¨	Definitive Proxy Statement
¨	Definitive Additional Materials
x	Soliciting Material Pursuant to §240.14a-12

 

SYNOVIS LIFE TECHNOLOGIES, INC.

 

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):
x	No fee required.
¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies:
	(2)	Aggregate number of securities to which transaction applies:
	(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:

 

¨	Fee paid previously with preliminary materials.
¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:
	(2)	Form, Schedule or Registration Statement No.:
	(3)	Filing Party:
	(4)	Date Filed:

 

 

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Filed by Synovis Life Technologies, Inc.

Pursuant to Rule 14a-12 under the Securities Exchange Act of 1934

Subject Company: Synovis Life Technologies, Inc.

Commission File No: 0-13907

 

 

FROM:	FOR:
Padilla Speer Beardsley Inc.	Synovis Life Technologies, Inc
1101 West River Parkway	2575 University Ave. West
Minneapolis, Minnesota 55415	St. Paul, Minnesota 55114
CONTACTS:	CONTACTS:
Nancy A. Johnson / Marian Briggs	Richard Kramp, President and CEO
[phone] / [phone]	Brett Reynolds, CFO
	[phone]

 

FOR IMMEDIATE RELEASE

SYNOVIS LIFE TECHNOLOGIES REPORTS 22 PERCENT REVENUE INCREASE AND EARNINGS PER SHARE OF $0.24 IN FISCAL 2011 FOURTH QUARTER

Diversified Product Portfolio Lifts Revenue 20 Percent and Net Income 74   Percent for Full Fiscal Year

ST. PAUL, Minn., December 14, 2011 ─ Synovis Life Technologies, Inc. (Nasdaq: SYNO), today reported its financial results for the fourth quarter and fiscal year ended October 31, 2011.

 

Yesterday, Synovis and Baxter International Inc., (NYSE:BAX) announced a definitive agreement for Baxter to acquire Synovis. The Synovis board of directors has unanimously approved the transaction and recommends that shareholders approve the agreement at an offer price of $28 per share, which equates to $325 million of equity value or approximately $260 million net of acquired cash, cash equivalents and investments.  The offer price represents a 53 percent premium above Synovis’ average stock price of the four weeks prior to announcement. The transaction is expected to close in the first calendar quarter of 2012, subject to approval by Synovis’ shareholders, customary closing conditions and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

 

For the fiscal fourth quarter, net revenue rose to a record $22.1 million, a 22 percent increase over $18.1 million in the year-ago period. Operating income totaled $4.2 million, an 86 percent gain over operating income of $2.2 million in the year-ago period. Net income for the fiscal 2011 fourth quarter was $2.7 million, or $0.24 per diluted share, compared to net income of $1.5 million, or $0.13 per diluted share, in the fiscal 2010 fourth quarter.

 

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Synovis Life Technologies

December 14, 2011

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For the full fiscal year, net revenue rose to $82.4 million, up 20 percent from $68.6 million in fiscal 2010. Operating income for fiscal 2011 was $12.4 million, up 69 percent from operating income of $7.3 million last fiscal year. Net income was $8.5 million in fiscal 2011, or $0.73 per diluted share, compared to $4.9 million, or $0.43 per diluted share, in the previous fiscal year.

Conference Call Canceled

 

Given the acquisition announcement, Synovis Life Technologies has canceled its fourth quarter conference call which was scheduled for 10 a.m. CT today.

About Synovis Life Technologies

 

    Synovis Life Technologies, Inc., a diversified medical device company based in St. Paul, Minn., develops, manufactures and markets biological and mechanical products used by several surgical specialties to facilitate the repair and reconstruction of soft tissue damaged or destroyed by disease or injury. The company’s products include implantable biomaterials for soft tissue repair, devices for microsurgery and surgical tools – all designed to reduce risks and/or facilitate critical surgeries, improve patient outcomes and reduce healthcare costs. For additional information on Synovis Life Technologies and its products, visit the company’s website at www.synovislife.com .

 

Additonal Information about the Proposed Transaction and Where You Can Find It

 

Synovis will file with the Securities and Exchange Commission (the “ SEC ”) preliminary and definitive proxy statements and other relevant materials in connection with the proposed acquisition of Synovis by Baxter.  The definitive proxy statement will be mailed to Synovis shareholders.  Before making any voting or investment decisions with respect to the transaction, investors and security holders of Synovis are urged to read the proxy statement and the other relevant materials when they become available because they will contain important information about the transaction and Synovis.  Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the SEC at the SEC’s website at www.sec.gov.  In addition, investors and security holders may obtain free copies of the documents filed with the SEC by accessing Synovis’s website at www.synovislife.com by clicking on the “Investor Information” link and then clicking on the “SEC Filings” link or by writing to Synovis at 2575 University Ave. W., St. Paul, Minnesota 55114.

Information Regarding Participants

 

Synovis and its officers and directors may be deemed to be participants in the solicitation of proxies from Synovis’s shareholders with respect to the acquisition. Information about Synovis’s executive officers and directors and their ownership of Synovis stock is set forth in the proxy statement for the Synovis 2011 Annual Meeting of Shareholders, which was filed with the SEC on January 18, 2011. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of Synovis and its executive officers and directors in the acquisition by reading the preliminary and definitive proxy statements regarding the merger, which will be filed with the SEC.

 

Forward-looking statements contained in this press release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements can be identified by words such as “should”, “could”, “may”, “will”, “expect”, “believe”, “anticipate”, “estimate”, “continue”, or other similar expressions. Certain important factors that could cause results to differ materially from those anticipated by the forward-looking statements made herein include whether and when the proposed acquisition by Baxter International, Inc. will be consummated, the timing of product introductions, the ability of the sales force to grow and sustain revenues, the impact of increased competition in various markets Synovis serves, the ability to grow Orthopedic and Wound revenue and achieve profitability, outcomes of clinical and marketing studies as well as regulatory submissions, the number of certain surgical procedures performed, the ability to identify, acquire and successfully integrate suitable acquisition candidates, any operational or financial impact from the current global economic environment, the impact of healthcare reform legislation, as well as other factors found in the Company’s filings with the Securities and Exchange Commission, such as the “Risk Factors” section in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended October 31, 2010.

 

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Synovis Life Technologies

December 14, 2011

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SYNOVIS LIFE TECHNOLOGIES, INC.

Consolidated Statements of Income (unaudited)

(In thousands, except per share data)

		Three Months Ended								Twelve Months Ended
		October 31,								October 31,
		2011				2010				2011				2010
Net revenue		$	22,053			$	18,116			$	82,363			$	68,565
Cost of revenue			5,874				5,026				22,343				19,025
Gross margin			16,179				13,090				60,020				49,540
Gross margin percentage			73	%			72	%			73	%			72	%
Selling, general and administrative expenses			10,955				9,554				42,949				37,812
Research and development expenses			1,065				1,296				4,709				4,393
Operating expenses			12,020				10,850				47,658				42,205
Operating income			4,159				2,240				12,362				7,335
Interest income			83				73				311				284
Income before provision for income taxes			4,242				2,313				12,673				7,619
Provision for income taxes			1,527				833				4,212				2,743
Net income		$	2,715			$	1,480			$	8,461			$	4,876
Basic earnings per share		$	0.24			$	0.13			$	0.74			$	0.43
Diluted earnings per share		$	0.24			$	0.13			$	0.73			$	0.43
Weighted average shares outstanding - basic			11,344				11,284				11,381				11,262
Weighted average shares outstanding - diluted			11,486				11,449				11,571				11,441

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Synovis Life Technologies

December 14, 2011

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SYNOVIS LIFE TECHNOLOGIES, INC.

 

Consolidated Revenues (unaudited)

(In thousands)

		Three Months Ended								Twelve Months Ended
		October 31,								October 31,
		2011				2010				2011				2010
Peri-Strips		$	6,614			$	5,153			$	23,675			$	19,414
Tissue-Guard			4,970				4,221				18,407				16,550
Veritas			3,956				3,661				15,829				14,368
Microsurgery			4,326				3,123				15,190				11,020
Orthopedic and Wound			752				685				3,514				1,878
Surgical tools and other			1,435				1,273				5,748				5,335
Total Revenue		$	22,053			$	18,116			$	82,363			$	68,565
Domestic		$	18,675			$	15,247			$	70,130			$	57,700
International			3,378				2,869				12,233				10,865
Total Revenue		$	22,053			$	18,116			$	82,363			$	68,565

 

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Synovis Life Technologies

December 14, 2011

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SYNOVIS LIFE TECHNOLOGIES, INC.

 

Consolidated Balance Sheets

As of October 31, 2011 (unaudited) and October 31, 2010

(In thousands, except share and per share data)

		October 31, 2011				October 31, 2010
ASSETS
Current assets:
Cash and cash equivalents		$	18,013			$	12,951
Short-term investments			41,203				41,119
Accounts receivable, net			11,262				8,701
Inventories			9,998				9,433
Deferred income tax asset, net			447				367
Other current assets			1,973				1,715
Total current assets			82,896				74,286
Investments, net			7,335				7,854
Property, plant and equipment, net			4,154				3,401
Goodwill			3,620				3,620
Other intangible assets, net			5,764				6,182
Deferred income tax asset, net			2,166				2,139
Total assets		$	105,935			$	97,482
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,235			$	1,644
Accrued expenses			7,780				6,371
Total current liabilities			10,015				8,015
Total liabilities			10,015				8,015
Shareholders’ equity:
Preferred stock: authorized 5,000,000 shares of $.01 par value; none issued or outstanding at both dates			---				---
Common stock: authorized 20,000,000 shares of $.01 par value; issued and outstanding 11,167,690 and 11,228,654 at October 31, 2011 and October 31, 2010, respectively			112				112
Additional paid-in capital			59,832				61,780
Accumulated other comprehensive (loss) income			(34	)			26
Retained earnings			36,010				27,549
Total shareholders’ equity			95,920				89,467
Total liabilities and shareholders’ equity		$	105,935			$	97,482

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Synovis Life Technologies

December 14, 2011

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SYNOVIS LIFE TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

For the fiscal years ended October 31,		2011				2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	8,461			$	4,876
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, plant and equipment			1,154				1,228
Amortization of intangible assets			734				782
Amortization of investment premium, net			1,263				1,626
Provision for uncollectible accounts			250				204
Stock-based compensation			1,231				1,455
Tax benefit from stock option exercises			(522	)			(296	)
Loss on sale or disposal of property, plant and equipment			25				192
Deferred income taxes			(107	)			(117	)
Changes in operating assets and liabilities:
Accounts receivable			(2,811	)			(1,980	)
Inventories			(565	)			(1,709	)
Other current assets			(258	)			40
Accounts payable			591				(318	)
Accrued expenses			1,931				920
Net cash provided by operating activities			11,377				6,903
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment			(1,932	)			(1,102	)
Investments in identifiable intangible assets			(316	)			(125	)
Purchases of investments			(51,116	)			(79,397	)
Redemptions of investments			50,228				73,618
Net cash used in investing activities			(3,136	)			(7,006	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds related to stock-based compensation plans			3,879				1,996
Repurchase of the Company's common stock			(7,580	)			(5,101	)
Excess tax benefit of stock option exercises			522				296
Net cash used in financing activities			(3,179	)			(2,809	)
Net change in cash and cash equivalents			5,062				(2,912	)
Cash and cash equivalents at beginning of year			12,951				15,863
Cash and cash equivalents at end of year		$	18,013			$	12,951

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