Advanced Medical's IMED and IVAC complete $400 million merger.

SAN DIEGO--(BUSINESS WIRE)--Nov. 26, 1996--Advanced Medical Inc. (ASE: AMA) and IVAC Medical Systems Inc. (IVAC) Tuesday announced the completion of the merger between IVAC and Advanced Medical's wholly owned subsidiary, IMED Corporation (IMED).

The merger will create a global leader in intravenous infusion therapy products. The combined company will be renamed at a later date.

"Our strategic intent is to become the global leader in advanced medical instruments and devices," William J. Mercer, President and CEO, said. "The brand equity brought about by this combination is unsurpassed in our served markets throughout the world. We will strive to continue to offer high quality products and services that will build on our tradition of value and technological excellence for our customers."

The combined company, which recorded more than $350 million in revenues in 1995, will provide opportunities for significant economies of scale and numerous manufacturing synergies. Additional benefits may include a broader product portfolio, expanded customer bases, greater purchasing power, improved cross-selling opportunities and enhancement of financial strength. Advanced Medical expects a one-time charge against earnings in the fourth quarter of 1996 in order to complete the merger of the two companies.

Financial Structure

The acquisition price of approximately $400 million was paid in cash and, together with related transactions, was financed through a $250 million bank credit facility, $200 million of subordinated notes, and $77.5 million of common equity from Advanced Medical's chairman and principal stockholder, Jeffry M. Picower.

Also today, Advanced Medical announced that it would redeem all of its outstanding 15 percent debentures due 1999 on Dec. 18, 1996, for an amount (including redemption premiums) of 110 percent of the principal amount plus accrued interest. In addition, IVAC announced the results of its offer to purchase all of its outstanding 9 1/4 percent senior notes. All of the outstanding notes were tendered in the tender offer. IVAC has given notice to the depository for the tender offer that all the notes were accepted for payment.

Management

Management consultants A.T. Kearney have been retained to guide the integration process of the two companies and the development of the new organization's operating structure. Leadership for the combined company has been selected from both organizations and is now in place.

As previously announced, William J. Mercer, IVAC President and Chief Executive Officer (CEO), will become the President and CEO of the combined company, and Joseph W. Kuhn, Advanced Medical and IMED President, will become the Executive Vice President and Chief Financial Officer.

The combined company's senior management team is summarized below: -0-

                   New Position                Previous Position

William J. Mercer  President and Chief         IVAC, President and Chief
                   Executive Officer           Executive Officer

Joseph W. Kuhn     Executive Vice President    IMED, President
                   and Chief Financial Officer

John de Groot      VP and General Counsel      IVAC, VP and General
                                               Counsel

Sally Grigoriev    VP, Quality and             IVAC, VP of Quality and
                   Regulatory Affairs          Regulatory Affairs

Richard Mirando    VP, Operations              IVAC, VP and General
                                               Manager of Europe, Africa,
                                               and the Middle East

L. James Runchey   VP, Human Resources         IVAC, VP of Human
                                               Resources

Richard Salzar     VP, Southeast Asian and     IMED, VP of International
                   Latin American Sales        Sales

Anthony B. Semedo  VP, Research and            IVAC, VP of Research and
                   Development                 Development

Jake St. Philip    VP, Sales, Americas         IVAC, VP of Sales,
                                               Americas

Kevin Whiteley     VP, Marketing               IMED, VP of Marketing

Concurrent with Richard Mirando's move to San Diego to head Operations, the company has a search under way for Vice President and General Manager of European, African and Middle Eastern operations.

Advanced Medical, through its IMED Corporation subsidiary, is one of the largest developers and manufacturers of intravenous infusion pumps and proprietary disposable products in the United States, and has sales in 38 foreign countries. Advanced Medical reported 1995 sales of more than $112 million and income from operations of more than $14.7 million.

IVAC, founded in 1968, is a leading provider of infusion systems and related technologies in the health care industry. IVAC's principal line of business is the design, manufacture and marketing of intravenous infusion therapy products, vital signs instruments, and related disposables. IVAC's products are distributed in more than 120 countries worldwide. IVAC reported 1995 sales of approximately $241 million.

Statements in this news release which are not historical facts, including statements about expectations regarding the financial results of the combined company following the merger, are forward-looking statements that involve risks and uncertainties. Risk factors, including without limitation changes in the market and competition, are detailed in the Securities and Exchange Commission filings of Advanced Medical and IVAC, particularly their respective Form 10-K filings for the year ended Dec. 31, 1995.

CONTACT: At the Companies:

William Mercer Joseph Kuhn

619/458-7551 619/566-0192

or

Financial Relations Board

Moira Conlon/Kathy Brunson

310/442-0599

or

Stoorza Ziegaus & Metzger

Virginia Rybski/Joleen Schultz

619/236-1332 x244