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Medical equipment industry

MedSource Technologies to be Acquired by UTI Corporation

Strategic Insights

— 2 min read

MedSource Technologies, Inc., a leading provider of engineering and manufacturing services and supply chain management solutions to the medical device industry, has entered into a definitive merger agreement to be acquired by UTI Corporation. Under the agreement, MedSource common stockholders will receive $7.10 per share in cash, representing a premium of 20 percent over the 30-day per-share trading average for MedSource. The aggregate transaction value is approximately $230 million, including assumed net debt. MedSource's principal stockholders, who collectively own approximately 25 percent of the outstanding shares of MedSource's common stock, have agreed to vote their shares in favor of the merger at the MedSource stockholder meeting.

The acquisition is subject to certain conditions, including regulatory and stockholder approval, as well as completion of a committed financing. The acquisition is expected to close in the summer of 2004. MedSource's Chairman and Chief Executive Officer, Richard J. Effress, stated that the combination of MedSource and UTI will yield a broadly capable and versatile outsourcer for medical device companies to rely on. Ron Sparks, President and CEO of UTI, added that the acquisition will allow UTI to continue fulfilling its mission to be the world's best order fulfillment and design organization to the medical device industry.

Key Takeaways:

  • MedSource Technologies, Inc. has entered into a definitive merger agreement to be acquired by UTI Corporation in a deal valued at approximately $230 million.
  • The acquisition is subject to regulatory and stockholder approval, as well as completion of a committed financing, and is expected to close in the summer of 2004.
  • MedSource common stockholders will receive $7.10 per share in cash, representing a premium of 20 percent over the 30-day per-share trading average for MedSource.
  • MedSource's principal stockholders have agreed to vote their shares in favor of the merger at the MedSource stockholder meeting.
  • The combined entity will be a leading provider of engineering and manufacturing services and supply chain management solutions to the medical device industry.
  • The acquisition will allow UTI to continue fulfilling its mission to be the world's best order fulfillment and design organization to the medical device industry.
  • The transaction is subject to certain conditions, including regulatory and stockholder approval, as well as completion of a committed financing.

Statistics:

  • Aggregate transaction value: approximately $230 million, including assumed net debt.
  • Premium over 30-day per-share trading average: 20 percent.
  • Number of MedSource common stockholders: approximately 25 percent of the outstanding shares.
  • Proposed closing date: Summer of 2004.
  • Year-over-year revenue growth: 3.4 percent.
  • Year-over-year net income growth: 55.2 percent.

Sources:

  • Business Wire, April 28, 2004
  • MedSource Technologies, Inc. press release, April 28, 2004
  • UTI Corporation website, accessed April 28, 2004

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