Intermagnetics to Divest Polycold Subsidiary to Focus on Expanding Medical Devices Business
16 12월 2004 - 9:30PM
PR Newswire (US)
Intermagnetics to Divest Polycold Subsidiary to Focus on Expanding
Medical Devices Business * Helix Technology to Buy Business for
$49.2 Million in Cash at Closing, Plus Assumption of Post-Close Tax
Obligation LATHAM, N.Y., Dec. 16 /PRNewswire-FirstCall/ --
Intermagnetics General Corporation (NASDAQ:IMGC) today announced
that it has signed a definitive agreement to sell its Polycold
Systems subsidiary to Helix Technology Corporation (NASDAQ:HELX)
for $49.2 million in cash at closing plus the assumption of a
post-close tax obligation of about $3.3 million. The transaction,
approved by both companies' boards of directors, is subject to
customary closing conditions, including regulatory approval and is
scheduled to close in mid-February 2005. "Polycold has been a very
positive contributor to Intermagnetics' growth in revenue, earnings
and cash flow over the past couple of years," said Glenn H.
Epstein, chairman and chief executive officer of Intermagnetics.
"However, we believe that our shareholders' long-term interests are
best served by focusing our resources on our expanded and growing
medical devices business. We have strengthened our position in the
medical devices marketplace with our acquisitions of Invivo and MRI
Devices during 2004. The proceeds from the Polycold sale will
enable us to substantially reduce debt associated with those
acquisitions and will provide even broader flexibility in
considering other strategic initiatives to further grow
Intermagnetics. "We are confident that Polycold and its customers
will benefit from Helix's expertise in vacuum technology and its
well-known reputation within this market," Epstein said. "Polycold
is having an outstanding year and is well positioned for continued
growth. As we have demonstrated in the past, we take great pride in
placing our divested operations with strategic buyers that value
not only the physical assets, but the people that have made the
business successful. We believe that this transaction is in
everyone's best interests, including the customers, employees and
shareholders of both Intermagnetics and Helix." Michael Burke,
chief financial officer of Intermagnetics, said: "Using the
proceeds of this sale to substantially reduce our bank debt further
strengthens our balance sheet and provides us increased financial
flexibility to pursue incremental growth opportunities. We
anticipate that the Polycold sale will result in a large gain -- in
excess of $30 million pre-tax, or about $0.70 EPS -- depending on
final adjustments to our cost basis and associated closing
expenses." Burke said the total transaction value of nearly $53
million will consist of $49.2 million to be paid in cash at closing
followed by a subsequent payment by Helix of up to a maximum of
$3.3 million to reimburse Intermagnetics for certain tax
obligations. Burke also reaffirmed the company's previously issued
guidance for second quarter revenue and earnings. Results are
scheduled to be released post-market on December 20, 2004. "The
anticipated effect of the transaction on our full- year reported
EPS-ending May 29 2005-is clearly going to be beneficial," Burke
continued. "From an ongoing operational perspective, we expect to
subtract a little more than one quarter's worth of Polycold's
revenue, earnings and cash flow from our consolidated results. We
anticipate that the overall impact to prior guidance for FY 2005
operating earnings and EBITDA will be quite modest as we plan to
apply the sale proceeds to substantially reduce our debt servicing
costs. Further details will be provided when the transaction is
closed." Following the sale of Polycold, Intermagnetics will
consist of four businesses: the Magnet Business Group, which
designs, manufactures and sells superconducting magnets for
magnetic resonance imaging (MRI) systems; Invivo Diagnostic
Imaging, which designs, manufactures and sells radio frequency (RF)
coils and related sub-systems used by MRI systems; Invivo Patient
Care, which designs, manufactures and sells patient monitoring
systems; and SuperPower, Inc., which is developing
second-generation, high-temperature superconducting (HTS) materials
and related devices designed to enhance capacity, reliability and
quality of transmission and distribution of electrical power. A
conference call to discuss Q2 results and the Polycold transaction
is scheduled for Tuesday, December 21st beginning at 11a.m. EST.
The call will be broadcast live and archived over the Internet
through the company's web site http://www.intermagnetics.com/ under
the Investor Relations section. The domestic dial-in number for the
live call is (877) 407-8037. The international dial-in number is
(201) 689-8037. No conference code is required for the live call.
Intermagnetics (http://www.intermagnetics.com/ ) draws on the
financial strength, operational excellence and technical leadership
in its expanding businesses within Medical Devices that encompass
Magnetic Resonance Imaging (MRI) Magnet Systems, Invivo Diagnostic
Imaging (focusing on MRI components and imaging sub-systems) and
Invivo Patient Care (focusing on monitoring and other patient care
devices). Intermagnetics is also a key supplier to the markets
within Instrumentation and has become a prominent participant in
superconducting applications for Energy Technology. The company has
a more than 30-year history as a successful developer, manufacturer
and marketer of superconducting materials, high-field magnets,
medical systems & components and other specialized high-value
added devices. Safe Harbor Statement: The statements contained in
this press release that are not historical fact are
"forward-looking statements" which involve various important
assumptions, risks, uncertainties and other factors. These forward-
looking statements are based on currently available competitive,
financial and economic data and management's views and assumptions
regarding future events. Such forward-looking statements are
inherently uncertain. Intermagnetics cannot provide assurances that
the disposition of the business will be completed due to certain
risks and uncertainties, including but not limited to: possible
future legal proceedings; the parties' ability to meet closing
requirements including all conditions precedent. Other risks and
uncertainties include the company's ability to meet the
performance, quality and price requirements of our customers and
maintain gross margin levels through continued production cost
reductions and manufacturing efficiencies; the ability of the
company's largest customer to maintain and grow its share of the
market for MRI systems; the company's ability to successfully
integrate recent acquisitions; and the company's ability to invest
sufficient resources in and obtain third-party funding for its HTS
development efforts and avoid the potentially adverse impact of
competitive emerging patents, as well as other risks and
uncertainties set forth herein and in the company's Annual Report
on Forms 10-K and 10-Q. Except for the company's continuing
obligation to disclose material information under federal
securities law, the company is not obligated to update its
forward-looking statements even though situations may change in the
future. The company qualifies all of its forward-looking statements
by these cautionary statements. DATASOURCE: Intermagnetics General
Corporation CONTACT: Glenn Epstein, Chairman & CEO, or Cathy
Yudzevich, IR Manager, +1-518-782-1122, both of Intermagnetics
General Corporation Web site: http://www.intermagnetics.com/
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