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NxStage® Medical Announces
Agreement to Acquire Medisystems Corporation and Certain
Affiliated Entities
-- Medisystems is a Leading Independent Provider of U.S.
Dialysis
Disposables
-- Expansion of Product Breadth and Vertical Integration
Designed to
Better Serve Customers
-- Expected to be Immediately Accretive and to Accelerate
NxStage's
Timeline to Profitability
LAWRENCE, Mass., June 4 /PRNewswire-FirstCall/ -- NxStage
Medical, Inc. (Nasdaq: NXTM), the manufacturer of the NxStage
System One(TM) portable kidney dialysis machine, today announced
that it had entered into a definitive agreement to acquire
Medisystems Corporation and certain affiliated entities ("Medisystems")
for 6.5 million shares of NxStage common stock. The transaction
is currently valued at approximately $78.7 million, based on
closing stock price of $12.11 on June 4, 2007.
Headquartered in Seattle, Washington, Medisystems is a privately
owned, developer, manufacturer and distributor of medical
devices for use in dialysis and blood related treatments.
Medisystems is a U.S. market leader in hemodialysis blood tubing
sets, A.V. fistula needles, and other innovative ancillary
hemodialysis disposables. Medisystems and NxStage have been
business partners for seven years and Medisystems manufactures
the cartridge used in the NxStage System One. Medisystems has
manufacturing facilities in Mexico and Italy, as well as a
customer service facility in Denver, all of which are being
acquired by NxStage.
"This strategic acquisition is expected to transform NxStage
into a leader in the dialysis industry. Through this
transaction, we will gain scale, critical production control and
an experienced leadership team that we believe will enhance our
execution capabilities," said Jeffrey H. Burbank, President &
CEO of NxStage. "This transaction is beneficial to shareholders
as we believe it will be immediately accretive and accelerate
NxStage's timeline to profitability, which we now expect to
occur by the end of 2008. We expect that the financial and
operational benefits delivered by this acquisition will
significantly advance our mission to transform renal care."
For 2006, Medisystems recorded $65.5 million in revenues,
approximately $4.5 million of which was from Medisystems' sales
to NxStage. Medisystems' sales are nearly all in the U.S., and
predominantly made through distributors.
David S. Utterberg, Medisystems' President & CEO, owns directly
or indirectly all of the outstanding shares of Medisystems and
is a member of NxStage's Board of Directors. Mr. Utterberg
currently owns approximately 7% of NxStage common stock and his
total ownership would be approximately 23% of NxStage common
stock as a result of this transaction. He will serve in a
consulting capacity to the company for a two year period and
will remain a NxStage director.
"Medisystems has been a key supplier to NxStage since 1999 and I
have been an NxStage investor and director since 1998. I believe
this merger is a strategic and cultural fit and that this
transaction will deliver benefits to our employees and
customers," commented Mr. Utterberg. "I expect that the combined
companies will enhance NxStage's financial profile and position
both businesses for further growth."
Expected Benefits of the Acquisition
-
Industry Leadership: Medisystems' products have
a leading position in the U.S. dialysis industry, which we
believe will provide NxStage the scale to be a leader in the
industry. With expected gains on a commercial, operational and
financial scale, NxStage believes it will be better positioned
to maintain its leadership position in the developing home
hemodialysis market.
-
Strengthens Capabilities: Medisystems brings
depth in technology, manufacturing and leadership. The
Medisystems' brand has a leading position in the dialysis
industry, with strong manufacturing capabilities and a history
of innovation. Medisystems' executive team brings a long track
record of dialysis industry operating experience that is
expected to complement NxStage's ability to execute.
-
Financially Attractive: The acquisition is
expected to be immediately accretive and to accelerate NxStage's
timeline to profitability, positioning NxStage to be profitable
by the end of 2008.
The transaction is subject to the approval of
NxStage's shareholders, as well as customary closing conditions
and anti-trust approvals, including expiration of the applicable
waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. The transaction is expected to close
in the last quarter of 2007.
Merrill Lynch acted as financial advisor to NxStage and rendered
a fairness opinion to its Board of Directors.
Conference Call and Webcast
NxStage will host a conference call to discuss this announcement
at 9:00 AM. Eastern Time on June 5, 2007. To listen to the
conference call, please dial 800.573.4754 for domestic callers
and 617.224.4325 for international callers. The passcode is
54039666. A replay of the conference call will be available
beginning at 7:00 AM on June 6, 2007 by dialing 888-286-8010
(domestic) and 617-801-6888 (international), passcode 90138812.
An online archive of the conference call will also be available
by accessing the Investor Relations section of the company's
website at
ir.nxstage.com.
About Medisystems Corporation:
Medisystems Corporation is a medical device company that
develops, manufactures, imports and distributes medical devices,
primarily for use in dialysis and related blood treatments.
Medisystems is a market leader in the U.S. for hemodialysis
bloodtubing sets, A.V. fistula needles, apheresis needles and
other ancillary hemodialysis disposables in the United States.
The company was incorporated in 1981 and is headquartered in
Seattle, Washington with a client services group in Denver,
Colorado. Medisystems' manufacturing facilities are in Mexico,
where Medisystems manufactures and assembles components and
products; and in Italy, where Medisystems produces injection
molded components for Medisystems' finished products. For more
information, visit
www.medisystems.com.
About NxStage Medical:
NxStage Medical, Inc. (NASDAQ: NXTM) is a medical device
company, headquartered in Lawrence, Massachusetts, USA, that
develops, manufactures and markets innovative dialysis systems
for the treatment of end-stage renal disease, or ESRD, and acute
kidney failure. For more information on NxStage and its
products, please visit the company's website at
www.nxstage.com.
Forward-Looking Statements:
This release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements contained in this release that are not clearly
historical in nature are forward-looking, and the words
"anticipate," "believe," "expect," "estimate," "plan," and
similar expressions are generally intended to identify
forward-looking statements. Examples of these forward-looking
statements include statements as to the anticipated benefits of
this transaction, including anticipated improved scale of
operations, anticipated benefits in financial performance,
including the timing for achieving positive gross margin and
profitability, anticipated retention of key employees of
Medisystems, anticipated reductions in execution risks,
expectations with respect to NxStage's leadership role within
the industry, anticipated cultural and strategic fit of
Medisystems and NxStage, anticipated benefits to employees,
customers, and NxStage stockholders, anticipated demand for home
and or daily dialysis products, including demand for NxStage's
products and anticipated timing and success of the closing of
the proposed transaction. All forward-looking statements involve
risks, uncertainties and contingencies, many of which are beyond
NxStage's control, which may cause actual results, performance,
or achievements to differ materially from anticipated results,
performance or achievements including risks related to growth in
home or more frequent hemodialysis, market acceptance and demand
for NxStage's products and certain other factors that may affect
future operating results and which are detailed in NxStage's
filings with the Securities and Exchange Commission, including
the Quarterly Report on Form 10-Q for the period ended March 31,
2007.
In addition, the statements in this press release represent
NxStage's expectations and beliefs as of the date of this press
release. NxStage anticipates that subsequent events and
developments may cause these expectations and beliefs to change.
However, while NxStage may elect to update these forward-looking
statements at some point in the future, it specifically
disclaims any obligation to do so, whether as a result of new
information, future events, or otherwise. These forward-looking
statements should not be relied upon as representing NxStage's
expectations or beliefs as of any date subsequent to the date of
this press release.
Additional Information about the Stock Purchase and Where to
Find It
In connection with the proposed transaction described above,
NxStage intends to file a registration statement that contains a
proxy statement/prospectus with the Securities and Exchange
Commission (the "SEC"). Investors and securityholders of NxStage
are urged to read the proxy statement/prospectus (including any
amendments or supplements to the proxy statement/prospectus)
regarding the proposed transaction when it becomes available
because it will contain important information about NxStage, the
MDS Entities, David Utterberg and the proposed transaction.
NxStage stockholders will be able to obtain a copy of the proxy
statement/prospectus, as well as other filings containing
information about NxStage, without charge, at the SEC's Internet
site (www.sec.gov). Copies of the proxy statement/prospectus,
and the SEC filings that will be incorporated by reference in
the proxy statement/prospectus, can also be obtained, without
charge, by directing a request to NxStage Medical, Inc., 439
South Union Street, Fifth Floor, Lawrence, Massachusetts 01843
Attention: Investor Relations; telephone (978) 687-4700.
Participants in the Solicitation
NxStage, and its respective directors and executive officers,
may be deemed to be participants in the solicitation of proxies
in respect of the proposed transaction. Information regarding
NxStage's directors and executive officers is contained in
NxStage's Form 10-K for the year ended December 31, 2006 filed
with the SEC on March 16, 2007 and its most recent annual
meeting proxy statement filed with the SEC on April 30, 2007.
These documents are available free of charge as described above.
Mr. Utterberg is a director of NxStage and currently owns
approximately 7.2% of NxStage's outstanding common stock. Please
see the disclosure above relating to Mr. Utterberg's interest in
this proposed transaction. Information regarding the special
interests of NxStage's directors and officers in the proposed
transaction will also be included in the proxy
statement/prospectus referred to above.
Source
NxStage Medical, Inc.
-0- 06/04/2007
Contact
Stephanie Marks of NxStage Investor Relations, +1-888-698-6472 |