St. Jude Medical, Inc., a worldwide medical device technology and services company addressing cardiac, neurological and chronic pain patients, and EP MedSystems, Inc., a company who develops, manufactures and markets a line of products for use in the cardiac rhythm management or electrophysiology market, announced that the Boards of Directors of both companies have unanimously approved a definitive merger agreement under which St. Jude Medical will acquire EP MedSystems for $92.1 million. It is anticipated to close during the third quarter of 2008, but is subject to certain closing conditions and regulatory approvals and approval by EP MedSystems shareholders.
Under the merger agreement terms, EP MedSystems shareholders will get $3.00 of consideration for each EP MedSystems share they own, with a cash option or St. Jude Medical common stock, which both are subject to pro-ration. For pre-ration, St. Jude Medical will issue 40% of the total merger consideration in St. Jude Medical common stock at 60% in cash. If EP MedSystems shareholders decide to receive St. Jude Medical common stock, the amount will be determined based on the average closing price over 10 trading days, ending on the second business day before the transaction closes.
St. Jude Medical’s Board of Directors has authorized an additional stock buyback authorization of $50 million, which increases St. Jude Medical’s share repurchase from $250 million to $300 million.
Daniel J. Starks, Chairman, President and Chief Executive Office of St. Jude Medical said, “This transaction will accelerate the growth of St. Jude Medical’s program to help physicians cure atrial fibrillation. EP MedSystems’ new ClearWave™ signal recording technology and its next generation ViewFlex™ PLUS ICE catheter will be especially important additions to our AF technology platform.”
David Bruce, President and Chief Executive Officer of EP MedSystems commented, “With growth accelerating over the past year, EP MedSystems’ products and market position are stronger than they’ve ever been thanks to the focus and efforts of our employees. This transaction delivers significant shareholder value and enables our key product platforms to benefit from the extensive worldwide distribution, customer support and product development infrastructure of St. Jude Medical. We look forward to working with the St. Jude Medical team toward a seamless combination.”
The transaction is expected to accelerate St. Jude Medical’s atrial fibrillation program and immediately add two new growth drivers to St. Jude Medical’s program. In addition to the accelerated fibrillation program, this transaction will also expedite St. Jude Medical’s entry into the high-growth intracardiac ultrasound echocardiography (ICE) market with the EP MedSystems ViewMate® II intracardiac ultrasound system and the next generation ViewFlex™ PLUS ICE catheter scheduled for market release this quarter.
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