ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, June 12, 1996 TAG: 9606120037
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
After months of playing coy with a Texas company that kept increasing its purchase price, Sterile Concepts Inc. of Richmond finally got the offer it couldn't refuse.
Sterile, formerly owned by Carilion Health System of Roanoke, has agreed to merge with Maxxim Medical Inc. of Sugar Land, Texas. Maxxim's bid of $20 per share will be offered to Sterile stockholders on or before Friday.
Maxxim and Sterile both package surgical and clinical procedure trays and are ranked No.2 and No.3, respectively, among the six companies that dominate the market in sterile-tray preparation, said D. Randolph Graham, Sterile's chief financial officer.
Maxxim markets its trays under the name Sterile Designs. No decision has been made about which name will survive the merger, Graham said.
"Maxxim has indicated plans to keep substantially all of Sterile's employees and keep production facilities open," Graham said.
Sterile employs about 1,000 people in facilities in Temecula, Calif., Minnetonka, Minn., as well as Richmond, he said. Maxxim has a facility in Clearwater, Fla.
The two have been courting since February, when Maxxim offered $12 a share for Sterile. It then bid $16, $17.75, $19 and finally $20. Sterile stock closed at $193/4 Monday, the day the agreement was signed.
The full cost of the transaction is $147 million, which includes assumption of existing Sterile Concepts debt. NationsBank will finance the purchase, which is contingent upon tender of more than two-thirds of the 5.5million outstanding shares of common stock.
Sterile's profits have dropped over the past two years. Its consolidation with Maxxim follows a trend in the health care industry where size is being equated with survival. Mergers of hospital systems and the growth of group purchasing is pressuring suppliers to cut their prices.
LENGTH: Short : 45 linesby CNB