MEDTRONIC BUYS MINIMED PRIVATELY HELD 2ND FIRM ALSO ACQUIRED IN DEAL.Byline: Gregory J. Wilcox Staff Writer NORTHRIDGE - MiniMed Inc., which became the world's largest maker of insulin pumps under the leadership of its founder, Alfred E. Mann Alfred E. Mann (born 1925, Portland, OR), who is also known as Al Mann, is an American entrepreneur and philanthropist. He is a billionaire. Born and raised in Portland, his father was English and mother Polish. , and his privately held Medical Research Group were sold Wednesday to a Minneapolis-based medical device maker for $3.7 billion. Medtronic Inc. is paying $48 a share for the Northridge-based insulin- pump maker and $420 million for MRG MRG Merge MRG Minority Rights Group International MRG Mad River Glen (Vermont) MRG Mouvement des Radicaux de Gauche (French: Left Radical Movement) MRG Manyetik Rezonans Görüntüleme , a privately held company privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. in Sylmar that is developing implantable pumps and sensors that function together as an artificial pancreas The artificial pancreas is a technology in development to help diabetic persons automatically control their blood glucose level by providing the substitute endocrine functionality of a healthy pancreas. , which would be a breakthrough in treating diabetes. MiniMed holds an 8 percent stake in MRG. Kevin Sayer, MiniMed's chief financial officer, said the sale will enable Mann, a billionaire businessman and philanthropist, to fulfill his dreams of charitable giving. ``This is a transaction that can enable Al to do what he wants as far as creating his medical legacy,'' Sayer said. Mann has already put in place a donation plan for USC's medical school and is working on one for UCLA UCLA University of California at Los Angeles UCLA University Center for Learning Assistance (Illinois State University) UCLA University of Carrollton, TX and Lower Addison, TX . Medtronic is a leading medical technology company whose products are used to treat people with chronic disease. The company generates about half of its sales from defibrillators and pacemakers. The companies had been quietly courting each other for about two years and the relationship heated up this spring. Medtronic's offer was approved by MiniMed's board Tuesday night and the deal was signed and announced before the market opened Wednesday. ``We believe that Medtronic is the engine that can fuel our growth,'' said Terry Gregg, MiniMed's president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . ``As a management team, we have often stated we would like to be Medtronic when we grow up. Now we get to be a part of them.'' Medtronic officials said no major changes or layoffs are expected at MiniMed as a result of the deal. The company will continue to be headquartered in Northridge and top management will remain in place. ``The key determining factor in our due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. was the degree to which Terry and his team were excited about staying on and continuing to take MiniMed to the next level as a part of Medtronic. That was a very important part of the equation,'' Collins said. It will not be surprising, though, to see Medtronic eventually rename its insulin business something like Medtronic-MiniMed to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. what is a strong brand franchise. That was the strategy in two other similar- size acquisitions. While the companies compete in different medical markets, they have similar corporate cultures in terms of management style and a focus on patients' well-being. Analysts agreed that bodes well for MiniMed's integration into Medtronic. ``As much as anything, it's a good cultural fit and that's very important for these kinds of companies. These guys really have to work together for a long time. MiniMed is a fantastic company,'' said Benjamin Andrew Benjamin Andrew (1713 – December 16, 1790) was an American planter and statesman from Midway, Georgia. He represented Georgia as a delegate to the Continental Congress in 1787 and 1788. , an analyst at William Blair
Both companies benefit from the deal. Medtronic gains access to a new growth platform by acquiring a top-notch player in the diabetes treatment field. ``We have been contemplating these acquisitions for some time. We are confident that this combination presents a very strong strategic, financial and cultural fit and the very best way for Medtronic to enter the dynamic, high-growth diabetes market,'' Collins said. MiniMed will benefit from Medtronic's expertise in developing and marketing new medical technologies. The insulin-pump maker has enjoyed strong sales growth from $99.5 million in 1997 to $294 million last year by concentrating on the diabetes market. However, the company has basically picked all the low-hanging fruit by selling to endocrinologists who specialize in treating diabetes, said Ryan Rauch, an analyst at Adams, Harkness & Hill Inc. Now sales have softened as the company expands into the general practice market where 80 percent of diabetes patients receive treatment. Diabetes, the sixth-leading cause of disease-related death in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , affects 16 million people. Six years ago only 20,000 people used insulin pumps, versus more than 120,000 today, but the market is just barely penetrated. The next level of treatment could be the artificial pancreas. The pancreas is a gland behind the stomach that secretes digestive enzymes Digestive enzymes Molecules that catalyze the breakdown of large molecules (usually food) into smaller molecules. Mentioned in: Heartburn digestive enzymes and produces insulin. Archie Smith, managing director and senior health-care analyst at US Bancorp Piper Jaffray in Minneapolis, said MiniMed is an attractive acquisition. ``In the last three years they have grown revenue between 39 percent and 53 percent off a large base. They've done a great job of managing a business that's been in hyper-growth and have earned the right to keep managing the business,'' he said. Shares in MiniMed gained $2.77 to close at $46.77 on the Nasdaq market. Medtronic closed at $43, up 5 cents, on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . VITAL STATISTICS Headquarters: Northridge Industry: Advanced Medical Devices Share price as of May 30 close: $46.77 52-week high: $92.56 52-week low: $25.00 Shares outstanding: 64,734,002 Number of Employees as of 2000: 1,539 Chief Executive Officer: Alfred E. Mann President/Chief Operating Officer: Terrance Gregg Chief Financial Officer: Kevin R. Sayer CAPTION(S): photo, chart, box Photo: Insulin-pump maker MiniMed's sale Wednesday frees company founder Alfred E. Mann to fulfill his dreams of charitable giving. Marisa Roth/The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times Chart: Minimed's Marriage Box: Vital Statistics (see text) |
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