CareFusion to Acquire IV Innovator Medegen for $225 Million
SAN DIEGO, April 5 CareFusion Corp. (NYSE: CFN), a leading, global medical device company, today announced an agreement to acquire Medegen, a leading innovator in clinically differentiated needleless access valves and administration sets that deliver intravenous (IV) medication to patients, for $225 million in cash.
"Medegen is an ideal strategic fit with CareFusion due to the complementary nature of our infusion product lines, R&D investments, and our focus on products that are backed by clinical evidence and differentiation," said David Schlotterbeck, chairman and CEO of CareFusion. "With a global opportunity of more than $2 billion for disposable IV sets, Medegen will expand our clinically differentiated product line and add a new dimension to our existing infection prevention portfolio. We will continue to invest in these products to help hospitals reduce catheter-related blood stream infections and catheter occlusions."
Catheter-related blood stream infections (CRBSI) have been shown to increase a patient's hospital stay by 10 to 24 days, with approximately 25 percent of the 250,000 annual incidents resulting in death. Medegen products have been shown to contribute to reductions of up to 70 percent in these deadly infections. The U.S. Centers for Medicare and Medicaid Services have identified CRBSI as a "never event" and no longer provide reimbursement for care related to these cases, which cost an average of $29,000 per patient to treat.
"We look forward to being part of the thriving and innovative company we know CareFusion to be," said Charles M. Stroupe, chairman and CEO of Medegen. "As Medegen, we have created a rich, innovative technology portfolio and pipeline, backed by clinical studies that demonstrate the value we can bring hospitals in their ongoing efforts to eliminate catheter-related blood stream infections and catheter occlusions. As part of CareFusion, we have the opportunity to grow faster by making our technology available to an expanded customer base, with patients around the world benefiting."
CareFusion is an industry leader in IV infusion devices with its Alaris® system and Guardrails® safety software. Medegen markets clinically proven, needle-free IV disposable products under the MaxPlus(TM) and MaxGuard(TM) brands with patented technology designed to help health care providers reduce CRBSI and prevent catheter occlusions. Together, the companies have complementary product lines, research and development expertise and proprietary technologies to help hospitals improve the safe delivery of IV medications to patients.
There are additional opportunities for revenue synergies through CareFusion's well-established customer relationships worldwide. The acquisition is expected to be neutral to adjusted earnings in the first year and increasingly accretive thereafter. Subject to Hart-Scott-Rodino approval and other customary conditions, the acquisition is expected to close by the CareFusion fiscal 2010 year-end on June 30.
"We look forward to completing the acquisition and welcoming Medegen employees to CareFusion," Schlotterbeck added. "In addition to the complementary nature of our infusion product lines, we have similar company cultures that are committed to innovation and dedicated to the health care providers we serve."
CareFusion became a public company on Sept. 1, 2009 from the spinoff of Cardinal Health's Clinical and Medical Products business. Since its formation, CareFusion has indicated plans to acquire companies or technologies complementary to its industry leading infusion, respiratory, dispensing and surgical products businesses. Medegen would be its first acquisition.
About Medegen, Inc.
Medegen is a leading innovator in infusion therapy, focused on helping hospitals drive greater clinical performance for improved patient care. The growing company provides clinically superior medical products and reliable, cost-effective manufacturing services to the medical community through its three operating units: Manufacturing Services, Maximus and KippMed. Manufacturing Services provides cost-effective contract manufacturing solutions to medical device and pharmaceutical companies. KippMed manufactures and markets IV therapy components for the OEM market, drawing from a 25-year history in IV component supply. Maximus develops, manufactures and markets needleless intravenous therapy products for the acute care market. The Maximus line of medical products features patent-protected technologies designed to improve patient outcomes and help health care providers reduce bloodstream infection rates. Medegen is headquartered in Ontario, Calif. and has operations in Tijuana, Mexico. The company is owned by Nautic Partners and management. For more information, visit www.medegen.com.
About CareFusion Corporation
CareFusion (NYSE: CFN) is a global corporation serving the health care industry with products and services that help hospitals measurably improve the safety and quality of care. The company develops market-leading technologies including Alaris® IV pumps, Pyxis® automated dispensing and patient identification systems, AVEA® and Pulmonetic Systems ventilation and respiratory products, ChloraPrep® products, MedMined(TM) services for infection surveillance, NeuroCare neurological monitoring and diagnostic products, V. Mueller® surgical instruments, and an extensive line of products that support interventional medicine. CareFusion employs more than 15,000 people across its global operations. More information may be found at www.carefusion.com.
Cautions concerning forward-looking statements
The CareFusion news release and the information contained herein contains forward-looking statements addressing expectations, prospects, estimates and other matters that are dependent upon future events or developments. The matters discussed in these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. Forward looking statements include, but are not limited to, statements about the timing of the anticipated acquisition, the potential benefits and synergies of the anticipated acquisition, including the expected impact on future financial and operating results, and post acquisition plans and intentions. The forward-looking statements contained herein are based on the current expectations and assumptions of CareFusion and Medegen and not on historical facts. The following important factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the satisfaction of conditions to closing the agreement; the risk that the businesses will not be integrated successfully; and the risk that the cost savings and any other synergies from the acquisition may not be fully realized or may take longer to realize than expected. Additional factors that may affect future results are described in CareFusion's Quarterly Report on Form 10-Q for the quarter ended December 31, 2009 and Annual Report on Form 10-K for the year ended June 30, 2009. Except to the limited extent required by applicable law, CareFusion undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE CareFusion Corporation
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