MINNEAPOLIS and CHANGZHOU, China, Sept.
27, 2012 /PRNewswire/ -- Medtronic, Inc. (NYSE: MDT) and
China Kanghui Holdings (NYSE: KH) announced today that they have
entered into a merger agreement whereby Medtronic will acquire
Kanghui. The agreement calls for Medtronic to pay
approximately $816 million in cash
($30.75 per American depository
share). The total value of the transaction, net of Kanghui's
cash, is expected to be approximately $755
million.
"China is one of the fastest
growing medical device markets with significant scale
opportunities, and now Medtronic will establish a bigger and more
direct local presence," said Chris O'Connell, executive vice
president and president of Medtronic's Restorative Therapies Group,
including the Neuromodulation, Spine, Surgical Technologies and
Diabetes businesses. "Kanghui brings Medtronic a broad
product portfolio, a strong local R&D and manufacturing
operation, a vast China
distribution network and an exceptional management
team. This move will provide Medtronic sustainable
advantages in the fast-growing Chinese orthopedic segment, as well
as a foothold in the emerging global value segment in
orthopedics."
"This agreement is directly aligned with our corporate
strategies of globalization and economic value," said Omar Ishrak,
chairman and CEO of Medtronic. "Kanghui represents a
significant investment in China,
accelerating Medtronic's overall globalization strategy with an
established value segment distribution network and strong R&D
and operational capabilities."
As a leading provider of orthopedic devices in China, Kanghui brings a strong product
portfolio and new product pipeline in trauma, spine and joint
reconstruction. The combined portfolio expands Medtronic's
offerings in orthopedic surgery and complements the company's
existing presence in spine, neurosurgery, neuromodulation, advanced
energy and surgical navigation.
"We are proud of the company we've built and recognize there is
a tremendous opportunity to accelerate our global vision by
building on Medtronic's size, scale and expertise as part of this
combined organization," said Libo
Yang, CEO of Kanghui. "We look forward to bringing to
Medtronic our local operating expertise in China, including our wide distribution
network, strong local sales and marketing teams, local
manufacturing and R&D, as well as our active presence across a
number of value orthopedic product lines that are necessary for
success in China and other
emerging markets."
The transaction is expected to close in the next few months and
is subject to customary closing conditions, including approval from
the shareholders of Kanghui. Medtronic expects the net impact
from this transaction to be earnings neutral for fiscal years 2013
and 2014 as the company intends to offset any dilutive impact of
the transaction.
ABOUT KANGHUI
Kanghui is a public company founded in 1997 and is headquartered
in Changzhou. It is traded on the NYSE under
KH.
ABOUT MEDTRONIC
Medtronic, Inc. (www.medtronic.com), headquartered in Minneapolis, is the global leader in medical
technology – alleviating pain, restoring health and extending life
for millions of people around the world.
This Press Release contains forward‐looking statements that
may include statements regarding the intent, belief or current
expectations of Kanghui, Medtronic and their respective management.
Forward-looking statements include statements about the benefits
and advantages of the acquisition for Kanghui and Medtronic. Actual
results could differ materially from those projected in the
forward‐looking statements as a result of a number of important
factors, including, but not limited to, the risk that the
acquisition will not close as the transaction is subject to certain
closing conditions. In addition, if and when the transaction is
closed, there will be risks and uncertainties related to
Medtronic's ability to integrate Kanghui successfully, 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; disruption from the acquisition making it more difficult
to maintain relationships with customers, employees or suppliers;
and competition and its effect on pricing, spending, third‐party
relationships and revenues. Additional factors that may affect
future results are contained in the SEC filings for Medtronic,
including, but not limited to, Medtronic's Annual Report on Form
10‐K for the year ended April 27,
2012. Medtronic and Kanghui each disclaim any obligation to
update and revise statements contained in this release based on new
information or otherwise.
Contacts:
Cindy
Resman
|
Jeff Warren
|
Medtronic
|
Medtronic
|
Public
Relations
|
Investor
Relations
|
763-505-0291
|
763-505-2696
|
Marsha
Ma
|
Yuenching
Miao
|
China
Kanghui
|
China Kanghui
|
Investor
Relations
|
Investor
Relations
|
86 21 5031
9916-8305
|
86 519 8198
2961
|
SOURCE China Kanghui Holdings