Encore Medical Enters Into Agreement With Blackstone Capital Partners To Go Private for $6.55 Per Share
30 Junio 2006 - 6:50PM
PR Newswire (US)
AUSTIN, Texas, June 30 /PRNewswire-FirstCall/ -- Encore Medical
Corporation (NASDAQ:ENMC) ("Encore") today announced that it has
entered into a definitive merger agreement with a company newly
formed and controlled by Blackstone Capital Partners V L.P.
("Blackstone") in a going private transaction. Under the terms of
the agreement, Encore's stockholders will receive $6.55 in cash for
each share of Encore common stock they hold, a 36% premium to the
Nasdaq closing price of $4.81 on June 30, 2006. The transaction
will be financed through a combination of equity contributed by
Blackstone and debt financing. The total value of the transaction
is approximately $870 million. It is expected that members of
Encore's existing senior management team will retain their current
positions after the transaction closes and will participate in the
ownership of the ongoing entity. Encore entered into the merger
agreement based on the unanimous recommendation by a special
committee comprised of independent directors of Encore's board of
directors and the unanimous consent of its full Board of Directors.
Stockholders representing approximately 15% ownership of Encore's
common stock have entered into voting agreements in which they have
agreed to vote or execute consents, as applicable, in favor of the
approval of the merger agreement and the transactions contemplated
by the merger agreement. "This transaction offers outstanding value
for our stockholders with a significant premium over where our
stock has traded during the past year. It also provides Encore with
a strong financial partner with knowledge of the healthcare
industry to assist in our future growth," said Kenneth W. Davidson,
Chief Executive Officer and Chairman of the Board of Encore Medical
Corporation. Chinh E. Chu, Senior Managing Director of Blackstone
stated, "We are attracted to Encore's market leadership, solid
industry fundamentals and exciting prospects. We look forward to
working in partnership with the strong management of Encore to
accelerate the growth of the company." The closing of the
transaction is subject to certain terms and conditions customary
for transactions of this type, including receipt of stockholder and
regulatory approvals and the completion of a tender offer and
consent solicitation for all of an Encore subsidiary's outstanding
9.75% Senior Subordinated Notes. The parties currently anticipate
consummating the transaction later this year. The equity financing
necessary for the transaction has been fully committed by
Blackstone and the debt financing necessary for the transaction has
been fully committed by Bank of America and Credit Suisse, subject
to customary closing conditions including completion of definitive
documentation. Upon completion of the transaction, Encore will
become a privately held company and its common stock will no longer
be traded on the Nasdaq National Market. Banc of America Securities
LLC acted as financial advisor to Encore in connection with the
transaction. First Albany Capital, Inc. served as financial advisor
to the special committee of independent directors of Encore and
provided an opinion to the special committee and the board of
directors of Encore that the merger consideration is fair to Encore
stockholders from a financial point of view. Credit Suisse served
as financial advisor to Blackstone. About Encore Medical
Corporation Encore Medical Corporation is a diversified orthopedic
device company that develops, manufactures and distributes a
comprehensive range of high quality orthopedic devices used by
orthopedic surgeons, physicians, therapists, athletic trainers and
other healthcare professionals to treat patients with
musculoskeletal conditions resulting from degenerative diseases,
deformities, traumatic events and sports-related injuries. Through
its Orthopedic Rehabilitation Division, Encore is a leading
distributor of electrical stimulation and other orthopedic products
used for pain management, orthopedic rehabilitation, physical
therapy, fitness and sport performance enhancement. Encore's
Surgical Implant Division offers a comprehensive suite of
reconstructive joint products and spinal implants. For more
information, visit http://www.encoremed.com/ . About The Blackstone
Group The Blackstone Group, a global private investment and
advisory firm, was founded in 1985. The firm has raised a total of
approximately $59 billion for alternative asset investing since its
formation of which roughly $27 billion has been for private equity
investing. The healthcare sector is one of Blackstone's core
focuses, with current investments in pharmaceuticals, hospitals,
nursing homes, healthcare services and health insurance.
Blackstone's other core businesses include Private Real Estate
Investing, Corporate Debt Investing, Hedge Funds, Mutual Fund
Management, Private Placement, Marketable Alternative Asset
Management, and Investment Banking Advisory Services. Further
information is available at http://www.blackstone.com/ . Important
Information Encore will file with the Securities and Exchange
Commission a current report on Form 8-K, which will include the
merger agreement and related documents. The proxy statement that
Encore plans to file with the Securities and Exchange Commission
and mail to its stockholders will contain information about Encore,
the proposed merger and related matters. STOCKHOLDERS ARE URGED TO
READ THE PROXY STATEMENT CAREFULLY WHEN IT IS AVAILABLE, AS IT WILL
CONTAIN IMPORTANT INFORMATION THAT STOCKHOLDERS SHOULD CONSIDER
BEFORE MAKING A DECISION ABOUT THE MERGER. In addition to receiving
the proxy statement from Encore by mail, stockholders will be able
to obtain the proxy statement, as well as other filings containing
information about Encore, without charge, from the Securities and
Exchange Commission's website (http://www.sec.gov/ ) or, without
charge, from Encore at http://www.encoremed.com/ . This
announcement is neither a solicitation of proxy, an offer to
purchase nor a solicitation of an offer to sell shares of Encore.
Forward-Looking Information Except for the historical information
contained herein, the matters discussed are forward-looking
statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements
involve risks and uncertainties, such as the completion of this
transaction, conditions in the financing commitments that could
impact the ability to obtain long-term financing, the possibility
of the occurrence of an event that could constitute a Company
Material Adverse Effect as defined in the merger agreement and
other risks and uncertainties set forth in the Company's filings
with the Securities and Exchange Commission. There can be no
assurance that any transaction between Encore and Blackstone will
occur, or will occur on the timetable contemplated hereby. These
risks and uncertainties could cause actual results to differ
materially from any forward-looking statements made herein.
Contact: Harry L. Zimmerman Executive Vice President - General
Counsel (512) 832-9500 Chinh E. Chu Senior Managing Director The
Blackstone Group (212) 583-5872 DATASOURCE: Encore Medical
Corporation CONTACT: Harry L. Zimmerman, Executive Vice President -
General Counsel of Encore Medical Corporation, +1-512-832-9500, or
; or Chinh E. Chu, Senior Managing Director of The Blackstone
Group, +1-212-583-5872 Web site: http://www.encoremed.com/
http://www.blackstone.com/
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