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
October 22, 1996
Date of Report (Date of earliest event reported)
ST. JUDE MEDICAL, INC.
(Exact name of registrant as specified in charter)
Minnesota 0-8672 41-1276891
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Lillehei Plaza, St. Paul, MN 55117
(Address of principal executive offices) (Zip Code)
(612) 483-2000
Registrant's telephone number including area code
Not applicable
Former name or former address, if changed since last report
ITEM 5. OTHER EVENTS
On October 22, 1996, St. Jude Medical, Inc. ("St. Jude"), entered into
definitive agreements to acquire in cash transactions (a) from Telectronics
Pacing Systems, Inc., a wholly owned subsidiary of Pacific Dunlop, Ltd.
("Pacific Dunlop"), substantially all of its cardiac rhythm management assets,
(b) Medtel, a distribution company, also a wholly owned subsidiary of Pacific
Dunlop, Ltd., and (c) certain intellectual property rights from Intermedics,
Inc. ("Intermedics").
Separately, on October 22, 1996, St. Jude entered into a definitive
agreement providing for the merger of Ventritex, Inc. ("Ventritex"), into
Pacesetter, Inc. ("Pacesetter"), a wholly owned subsidiary of St. Jude. Each
outstanding share of Ventritex, Inc., common stock will be converted into .6
share of St. Jude common stock.
The acquisition of certain intellectual property rights from
Intermedics included settlements of intellectual property disputes between
Intermedics and Ventritex as well as Intermedics and Pacesetter.
The transactions with Pacific Dunlop are expected to close in the 1996
fourth quarter. The Ventritex transaction is expected to close by the end of the
first quarter 1997.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ST. JUDE MEDICAL, INC.
Date November 1, 1996 By /s/ Stephen L. Wilson
Stephen L. Wilson
Vice President - Finance
and Chief Financial Officer
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
99.1 "ST. JUDE MEDICAL TO ACQUIRE TELECTRONICS, MEDTEL, AND
SETTLE INTERMEDICS DISPUTE" news release.
99.2 "ST. JUDE AND VENTRITEX TO MERGE" news release.
EXHIBIT 99.1
Contacts: Paul Vetter Peter Gove Steve Wilson
Investor Relations Media Relations V.P. Finance & CFO
(612) 481-7791 (612) 481-7790 (612) 481-7542
Pacific Dunlop contacts: Rod Chadwick Martin Hudson
011-613-92707150 011-613-92707102
Telectronics contact: Larry Wettlaufer
(303) 799-2460
ST. JUDE MEDICAL TO ACQUIRE TELECTRONICS, MEDTEL
AND SETTLE INTERMEDICS DISPUTE
St. Paul, Minnesota, October 23, 1996 - - St. Jude Medical, Inc.
(NASDAQ/NNM:STJM) announced today it has signed definitive agreements (1) to
acquire from Telectronics Pacing Systems, Inc. of Englewood, Colorado, a wholly
owned subsidiary of Pacific Dunlop, Ltd., substantially all of its cardiac
rhythm management (CRM) assets; (2) to acquire Medtel, an Asia-Pacific medical
products distribution business which is also related to Pacific Dunlop; and (3)
to acquire certain intellectual property rights from Intermedics, Inc., a
Freeport, Texas unit of SulzerMedica, Inc. and settle disputes between
Intermedics and Ventritex, Inc. All are cash transactions. The Intermedics
agreement facilitates the acquisition by St. Jude Medical of Telectronics and
Ventritex, Inc., which was also announced today.
St. Jude Medical will pay $135 million in cash for the assets of Telectronics
and Medtel and $25 million for the Intermedics agreement, for a total of $160
million. The Telectronics agreement also includes an earnout provision tied to
future pacing sales which could result in additional payments of up to $40
million over six years if certain revenue milestones are achieved. The
Telectronics transaction is subject to government review and is expected to
close late this year.
Among the assets St. Jude Medical is acquiring from Telectronics are extensive
intellectual property assets, important patent cross-licensing agreements,
advanced bradycardia technology and global sales and marketing presence.
Liability for all Telectronics products manufactured or sold prior to the
closing of the transaction will not pass to St. Jude Medical. This includes all
liability related to its Accufix(TM) pacemaker leads. Telectronics has opened
the Accufix Research Institute in Englewood, Colorado, to deal with all matters
related to these lead products. St. Jude Medical will not manufacture these lead
products nor have any role in the management of the Accufix Research Institute.
The Intermedics agreement provides that upon the completion of St. Jude
Medical's acquisition of Telectronics, Pacesetter, a St. Jude Medical subsidiary
and Telectronics will provide a royalty-free patent license to Intermedics for
cardiac stimulation devices. Intermedics will provide Pacesetter and
Telectronics with a royalty-free patent license for cardiac stimulation devices.
In addition, Pacesetter will grant Intermedics a sublicense under Pacesetter's
patent license agreement with Angeion, Inc., which will provide Intermedics with
a license to certain Angeion patents.
Upon completion of St. Jude Medical's planned acquisition of Ventritex, the
agreement provides that Ventritex patents will be included in Pacesetter's
license to Intermedics and Intermedics' patent license to Pacesetter will also
apply to Ventritex products. In addition, all legal actions pending between
Intermedics and Ventritex as well as between Intermedics and Pacesetter will be
settled.
Commenting on the agreements, Ronald A. Matricaria, St. Jude Medical Chairman,
President and CEO, said, "We are making the Telectronics acquisition because of
our high regard for Telectronics' extensive intellectual property portfolio;
history of technological innovation, including minute ventilation sensor
technology and automatic mode switching; and experienced sales organization.
Despite a difficult challenge with certain pacemaker leads over the past two
years, Telectronics has a well deserved reputation for innovation and customer
support. We will move immediately upon completion of the transaction to
implement a comprehensive plan that takes advantage of the strengths of both
organizations to realize the significant synergies available from this business
combination.
"The Medtel distribution transaction is an investment in our Asia-Pacific
infrastructure and will assist us in achieving a long-standing strategic
objective of significantly expanding our direct sales and marketing presence in
that region of the world," Matricaria added.
"The patent cross-license and litigation settlement among Pacesetter,
Intermedics and Ventritex resolves issues which have consumed significant
amounts of management time and financial resources for all of these companies.
With this settlement in hand, St. Jude Medical will be able to focus its efforts
going forward on effectively integrating these businesses and expanding our
participation in the worldwide cardiac rhythm management business," Matricaria
concluded.
St. Jude Medical, Inc. (www.sjm.com) develops, manufactures and distributes
medical devices for the global cardiovascular market. The Company serves
patients and its physician customers worldwide with the highest quality products
and services including heart valves, cardiac rhythm management systems,
specialty catheters and other cardiovascular devices.
EXHIBIT 99.2
Contacts: Paul Vetter Peter Gove Steve Wilson
Investor Relations Media Relations V.P. Finance & CFO
(612) 481-7791 (612) 481-7790 (612) 481-7542
Ventritex contacts: Frank Fischer Michael Sweeney
(408) 738-4883 (408) 738-4883
ST. JUDE MEDICAL AND VENTRITEX TO MERGE
St. Jude Medical Adds Leading ICD Developer to
Cardiac Rhythm Management Business
St. Paul, Minnesota, October 23, 1996 - - St. Jude Medical, Inc.
(NASDAQ/NNM:STJM) and Ventritex, Inc. (NASDAQ/NNM:VNTX ) announced today they
have entered into a definitive agreement providing for the merger of Ventritex
into St. Jude Medical's Pacesetter subsidiary. Ventritex, Inc., of Sunnyvale,
California, is a leading global manufacturer of implantable cardioverter
defibrillator (ICD) systems.
The Board of Directors of both companies have approved the agreement. In the
merger, each outstanding share of Ventritex common stock will be converted into
.6 of a share of St. Jude Medical stock. The merger is anticipated to be
tax-free to Ventritex stockholders and accounted for as a pooling of interests.
Based on yesterday's closing market price, the transaction has an approximate
aggregate value of $505 million net of Ventritex cash balances. The merger is
subject to Ventritex shareholder approval and government review and it is
expected to close in the first quarter of 1997.
Ventritex is a significant participant in the worldwide ventricular tachycardia
and ventricular fibrillation (VT/VF) market. Its ICD products are highly
regarded by electrophysiologists. Ventritex President and CEO, Frank M. Fischer,
will remain with the Company as will other key members of the Ventritex senior
management team.
The Ventritex merger in combination with its previous acquisitions of
Pacesetter, a bradycardia pacing company and Daig, a specialty cardiovascular
catheter company, and today's announcement of the acquisition of Telectronics
Pacing Systems, Inc. will permit St. Jude Medical to offer a complete line of
cardiac rhythm management (CRM) products. Following the Ventritex acquisition,
St. Jude Medical will offer an ICD product line to its global customers for the
treatment of VT/VF. The combination of these companies creates a strong,
diversified global supplier of products and services for the treatment of heart
arrhythmias.
Ventritex also announced that in connection with the merger it has agreed to
repurchase 200,000 shares of its stock on the open market in the near future.
Commenting on the Ventritex and Telectronics transactions, Ronald A. Matricaria,
St. Jude Medical Chairman, President and CEO, said, "Today's announcements are
very important for our customers, employees and shareholders. Since St. Jude
entered the cardiac rhythm management market with the Pacesetter acquisition, we
have been committed to offer our customers a full line of products. Today's
announcements will allow us to fulfill that commitment.
"The Ventritex Cadet(R) and Contour(TM) ICDs in combination with the TVL(R)
transvenous lead systems are state of the art ICD products. Our first priority
will be to develop the plans for the sales and marketing, manufacturing and
research and development competencies of Pacesetter and Ventritex. We are
excited about providing our customers with the ICD products of Ventritex,"
Matricaria added.
"In combination with Pacesetter, Daig and Telectronics, the acquisition of
Ventritex positions St. Jude Medical to offer a complete line of electrical
stimulation and electrophysiology catheter products to clinicians and health
care providers, which will drive St. Jude's growth in the years ahead,"
Matricaria concluded.
On behalf of Ventritex, President and CEO, Frank M. Fischer, said, "The
agreement with St. Jude Medical will greatly benefit Ventritex shareholders,
employees and customers. The financial, manufacturing and distribution resources
of St. Jude Medical will create a more stable environment that will permit
Ventritex to compete more effectively for ICD business in the future."
St. Jude Medical, Inc. (www.sjm.com) develops, manufactures and distributes
medical devices for the global cardiovascular market. The Company serves
patients and its physician customers worldwide with the highest quality products
and services including heart valves, cardiac rhythm management systems,
specialty catheters and other cardiovascular devices.
Ventritex develops, manufactures and sells ICDs and related products for the
treatment of ventricular tachycardia and ventricular fibrillation.
