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CARDINAL DISTRIBUTION ANNOUNCES AGREEMENT TO ACQUIRE DURR DRUG COMPANY

CARDINAL DISTRIBUTION ANNOUNCES AGREEMENT TO ACQUIRE DURR DRUG COMPANY
 DUBLIN, Ohio, June 2 /PRNewswire/ -- Cardinal Distribution Inc. (NASDAQ: CDIC) announced today that it has entered into a definitive agreement to acquire the wholesale drug business of Durr-Fillauer Medical Inc. (NASDAQ: DUFM).
 The acquisition will follow a spin-off by DUFM of its medical supply and orthopedic business to existing DUFM stockholders. The spun-off business will continue to be headed by W. A. Williamson Jr., DUFM's chairman and chief executive officer.
 The transaction will take the form of a spin-off distribution of Durr Medical Corp. to DUFM stockholders, immediately followed by a merger transaction under which Cardinal will exchange its common shares for all the outstanding shares of DUFM. Both the spin-off and the merger have been structured as tax-free transactions, and Cardinal will account for the merger transaction using purchase accounting.
 The equity valuation of Durr Drug Co. in the transaction would total $166.5 million at the current market price for Cardinal shares. Cardinal will also assume approximately $70.4 million in long-term debt as part of the transaction, including DUFM's 7 percent convertible subordinated debentures due 2006, which will be convertible into Cardinal common shares following the merger. The exact number of Cardinal shares to be issued will be fixed prior to the closing based upon the then-current market price. If the market price of Cardinal shares prior to closing is between $26.75 and $32.75, the Cardinal shares issued in the merger will have an aggregate value (based on such market price) of $166.5 million. To the extent such market price exceeds $32.75, the aggregate consideration will be increased up to a maximum equity value of $181.5 million.
 The new Durr/Cardinal combination will be able to serve 68 percent of the U.S. population in 29 contiguous states throughout the eastern United States on a next-day delivery basis from a network of strategically located distribution centers.
 The definitive agreement has been approved by the boards of directors of both companies and the complete terms of the acquisition will be detailed in a proxy statement to be mailed to Cardinal shareholders after filing and review by the Securities and Exchange Commission. The transaction is expected to be completed by late summer and is subject to approval by the shareholders of both Cardinal and DUFM, and appropriate regulatory approvals.
 Cardinal is the leading wholesale drug distributor serving independent and chain drug store and hospital and managed care customers located in the northeastern United States with a rapidly expanding presence in the midwestern and southeastern markets. Cardinal reported revenues of $1.648 billion for its fiscal year ended March 31, 1992, and has experienced a 32 percent and 43 percent growth rate in sales and net earnings, respectively, over the last five years.
 Durr-Fillauer Medical Inc., based in Montgomery, Ala., is a major distributor of healthcare products in the United States and operates two primary subsidiaries. Durr Medical Corp., the subsidiary which serves the growing medical-surgical supply industry, together with DUFM's orthopedic business, reported revenues exceeding $250 million in 1991 and operates from 18 distribution centers covering more than 25 states.
 Durr Drug Co., the pharmaceutical distribution subsidiary of DUFM, is the premier drug wholesaler in the southeastern United States. Operating from six distribution centers, it reported revenues of $696 million in 1991 and a 21 percent sales increase in its first quarter ended March 31, 1992. Durr Drug's recent five-year growth rate for sales and earnings is approximately 20 percent.
 Williamson, DUFM's chairman and chief executive officer, said that the spin-off would enable Durr-Fillauer to better position and focus the medical and orthopedic businesses in a growth environment favorably influenced by increasing long-term demand and industry consolidation. "At the same time," he said, "Durr Drug Co. will be able to expand its business with a strong partner with whom we share similar business philosophies and a close relationship from previous joint ventures."
 Following the merger transaction, Charles E. Adair, who currently serves as DUFM's president and chief operating officer, will become president of Cardinal's Southeast Region. M. W. Cotton will continue as president of Durr Drug Co., which wil remain headquartered in Montgomery, Ala. Adair noted that the combination will expand both Cardinal and Durr Drug's ability to service existing customers over a larger region and facilitate new relationships with customers requiring a broad regional service capacity. "We are bringing a great company and a strong team of people to Cardinal with excellent systems already in place," Adair said. "Integration will be relatively straightforward, and we will be able to go to market together immediately following the merger," he said.
 Robert D. Walter, chairman and chief executive officer of Cardinal, commented that Durr Drug Co. is viewed as one of the best distributors in the industry, both in the quality of customer relationships and financial returns. "This will extend both our market strengths," he noted, "given their outstanding relationships in the hospital business, our chain business position and programs, and the fact that both of us have a strong value-added approach to business. In addition, we will be able to broaden the scope of our specialty distribution businesses, by expanding these innovative customer and supplier services over a larger base. Following the merger, we expect the annualized sales of the Durr/Cardinal combination to total approximately $3 billion. Overall, I think the benefits of the merger will show very quickly, particularly for customers and suppliers as we deliver more services to them," he said.
 Walter further commented that, from a financial perspective, the acquisition is expected to be non-dilutive to Cardinal's earnings per share for fiscal 1993, even before synergies. In addition, he said that the combination would increase Cardinal's equity base to nearly $400 million and improve its overall debt-to-total-capital ratio.
 Cardinal also announced that its board of directors had authorized the repurchase of up to two million common shares during the 15-month period ending Aug. 31, 1993. The repurchased shares, if and to the extent purchased, will be used for both acquisition and general corporate purposes.
 A registration statement related to the Cardinal common shares to be issued in the acquisition will be filed with the Securities and Exchange Commission, and such shares will be offered only by means of a prospectus filed with the SEC as part of such registration statement. Cardinal common shares may not be exchanged, nor may offers to exchange be accepted, prior to the registration statement being declared effective by the SEC.
 This announcement does not constitute an offer to exchange or the solicitation of an offer to exchange Cardinal common shares for DUFM common stock, nor shall any such exchange be permitted in any state in which such offer, solicitation or exchange would be unlawful prior to registration or qualification under the securities laws of any such state.
 -0- 6/2/92
 /CONTACT: David Bearman, senior vice president and chief financial officer of Cardinal, 614-761-8700; or Daniel J. Reid of the Financial Relations Board, 312-266-7800, for Cardinal/
 (CDIC DUFM) CO: Cardinal Distribution Inc.; Durr-Fillauer Medical Inc. ST: Ohio, Alabama IN: MTC SU: TNM


GK -- NY080 -- 6447 06/02/92 21:55 EDT
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Date:Jun 2, 1992
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