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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 30, 1999
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CARDIOTHORACIC SYSTEMS, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-27880 94-3228757
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
10600 North Tantau Avenue, Cupertino, California 95014
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(Address of Principal Executive Offices) (Zip Code)
Company's telephone number, including area code: (408) 342-1700
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(Former Name or Former Address, if Changed Since Last Report.)
ITEM 5. OTHER EVENTS
On August 30, 1999, CardioThoracic Systems, Inc. ("CTS") agreed to
be acquired by Guidant Corporation, an Indiana corporation ("Guidant")
through the statutory merger of Clydesdale Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Guidant ("Merger Sub"), with and
into CTS (the "Merger"), whereby CTS will become a wholly-owned subsidiary of
Guidant. The Merger will be accomplished pursuant to the Agreement and Plan
of Merger, dated as of August 30, 1999, among CTS, Guidant and Merger Sub,
and a related Certificate of Merger. The consummation of the Merger is
subject, among other things, to the approval of the Merger by the
stockholders of CTS, at a stockholders meeting, and the satisfaction of
certain other closing conditions.
As a result of the Merger, Guidant will become the owner of 100% of
the issued and outstanding common stock of CTS and at the effective time of
the Merger, each share of common stock, par value $.001 per share, of CTS
(the "CTS Common Stock") issued and outstanding immediately prior to the
effective time of the merger shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive such number or fraction of a number, rounded to four decimal places
(the "Exchange Ratio"), of shares of common stock, without par value, of
Guidant (the "Guidant Common Stock") that equals the result obtained by
dividing $19.50 by the "Average Price"; provided, however, that in no event
shall the Exchange Ratio exceed .3611 or be less than .2955. Further, all
unexpired and unexercised options to acquire CTS common stock will be
converted into options to purchase Guidant Common Stock. The shares to be
issued to CTS stockholders will be issued pursuant to a registration
statement on Form S-4, pursuant to the Securities Act of 1933, as amended.
"Average Price" means the average per share closing price of
Guidant Common Stock, as reported in The Wall Street Journal's New York Stock
Exchange Composite Transactions Tape, for each of the 20 full trading days
preceding the date of the last full trading day prior to CTS stockholders
meeting.
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ITEM 7. EXHIBITS.
Exhibit
Number Description
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20.1 Joint Press Release of CardioThoracic Systems, Inc. and
Guidant Corporation dated August 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, CardioThoracic Systems, Inc. has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
CARDIOTHORACIC SYSTEMS, INC.
Date: September 23, 1999 By: /s/ RICHARD M. FERRARI
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Richard M. Ferrari
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
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20.1 Joint Press Release of CardioThoracic Systems, Inc. and Guidant
Corporation dated August 30, 1999.
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Type: EX-20.1
SEQUENCE: 2
DESCRIPTION: JOINT PRESS RELEASE OF CARDIOTHORACIC SYSTEMS, INC.
AND GUIDANT CORPORATION
EXHIBIT 20.1
COMPANY PRESS RELEASE
GUIDANT ANNOUNCES ITS ACQUISITION OF CARDIOTHORACIC SYSTEMS, INC.
INDIANAPOLIS, Ind. and CUPERTINO, Calif.--(BW HealthWire)-- Aug. 30,
1999--Guidant Corporation (NYSE:GDT - NEWS; PCX:GDT), a world leader in the
treatment of cardiovascular and vascular disease, and CardioThoracic Systems,
Inc. (Nasdaq:CTSI - NEWS), a pioneer in less invasive cardiac surgery, today
announced an agreement for Guidant to acquire CardioThoracic Systems.
Under the terms of the agreement, each outstanding share of CardioThoracic
Systems (CTS) common stock will be exchanged for shares of Guidant common
stock valued at $19.50 per CTS share. The agreement is subject to possible
adjustment pursuant to a collar arrangement. The transaction will be a
tax-free exchange valued at approximately $313 million, and will be accounted
for as a pooling of interests transaction. Closure of the transaction is also
subject to certain conditions, including approval by CTS shareholders and
Hart-Scott-Rodino anti-trust clearance. This transaction is expected to close
in the fourth quarter of 1999 and will include one-time acquisition and
transition-related costs. The acquisition is not expected to impact earnings
in 2000 and is expected to be accretive by 2001.
"The acquisition of CTS, its innovative products and strong pipeline, will
provide a platform for Guidant's growth in cardiac surgery," said Ronald W.
Dollens, Guidant President and Chief Executive Officer. "CTS offers an
excellent strategic fit and leverage with Guidant's current cardiovascular
business lines."
CTS has developed a broad range of products to advance the field of less
invasive cardiac surgery. It pioneered the coronary artery bypass grafting
(CABG) procedure performed on a beating heart, with the CTS OPCAB(TM) and CTS
MIDCAB(TM) access platform and stabilizer systems. The procedure enables the
CABG procedure to be completed without the use of cardiopulmonary bypass,
potentially reducing post-operative hospital stay and surgical complications
while preserving the high quality clinical outcomes associated with
conventional CABG.
CTS has established a leadership position in the rapidly growing beating
heart segment of the CABG market, with several hundred cardiac centers
currently using CTS products. The company has also recently introduced
products for less invasive valve surgery and arrested heart CABG procedures.
"Cardiac surgery represents a significant growth opportunity for Guidant, and
CTS will enhance Guidant's offerings in this market," said Jay Watkins,
President of the Guidant Cardiac & Vascular Surgery Group. "We are impressed
with the progress CTS has made in building acceptance of the
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beating heart technique among surgeons through market-driven product
development, a commitment to clinical training, and favorable clinical
outcomes."
"We believe CTS's array of surgical products will complement Guidant's proven
cardiovascular franchise," said Richard M. Ferrari, President and CEO of CTS.
"Guidant's resources, in combination with CTS's proprietary product offerings
and product development capabilities, will enable us to participate fully in
the rapid growth of less invasive cardiac surgery."
James M. Cornelius, Chairman of Guidant's Board of Directors, stated, "With
the addition of CTS's cardiac surgery technology to the AAA technology
acquired with Endovascular Technologies in late 1997 and the very recent sale
of our general surgery assets, we believe that Guidant Cardiac & Vascular
Surgery now has the same strategic momentum and similar product sales
potential as our other two larger cardiovascular business units, Vascular
Intervention and Cardiac Rhythm Management."
A global leader in the medical device industry, Guidant provides innovative,
minimally invasive and cost-effective products and services for the treatment
of cardiovascular and vascular disease. For more information about Guidant's
products and services, visit the company's Web site at
HTTP://WWW.GUIDANT.COM.
CardioThoracic Systems, Inc. is a leading developer of proprietary
technologies for use in less invasive cardiac surgery. CTS introduced its
first-generation system for less invasive beating heart bypass surgery in
January 1997. Since that time, CTS has shipped more than 40,000 beating-heart
bypass systems.
