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SCHEDULE 14A INFORMATION
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NOVAMETRIX MEDICAL SYSTEMS INC.
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NOVAMETRIX [LOGO]
MEDICAL SYSTEMS INC.
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August 2, 1996
Dear Stockholder:
Your Board and Management of Novametrix are pleased to announce that we have
entered into a definitive merger agreement to acquire Andros, Inc. a worldwide
supplier and designer of non-dispersive infrared gas analyzers.
Under the terms of the merger, the stockholders of Novametrix will retain 55%
ownership of the combined company, which will retain the Novametrix name. The
combined company will be a world leader in the field of gas monitoring products
and sensor technology for medical applications. The merger will nearly triple
the revenues of Novametrix and should result in substantial earnings accretion
for Novametrix stockholders, even before taking into account efficiencies and
cost saving. Furthermore, the merger will create significant technological
synergies and an expanded market for each company's products and technologies.
The enclosed press release outlines in greater detail the reasons for and
benefits of this merger. Your board is continually exploring ways to improve
the performance of your company and maximize value for stockholders. We
believe that this merger will present exciting new opportunities for Novametrix
and benefit our customers, employees and stockholders alike.
The proposed transaction will be submitted to the stockholders for their
approval. We will notify you of our plans shortly.
Sincerely yours,
William J. Lacourciere
President and Chief Executive Officer
Under applicable regulations of the Securities and Exchange Commission, the
Company and the current Directors may be deemed to be "participants" in the
Company's solicitation efforts at the upcoming Annual Meeting. The current
Directors beneficially own, collectively in the aggregate, including currently
exercisable warrants and options, approximately 9.5% of the outstanding common
stock of the Company.
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1 BARNES INDUSTRIAL PARK ROAD * P.O. BOX 690 * WALLINGFORD, CT 06492
USA * 203-265-7701 * FAX 203-284-0753
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NOVAMETRIX [LOGO]
MEDICAL SYSTEMS INC.
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NOVAMETRIX MEDICAL SYSTEMS AND ANDROS TO MERGE
MERGER WILL CREATE A LEADER IN MEDICAL INSTRUMENTATION
WALLINGFORD, Conn., and BERKELEY, Calif., July 30, 1996 -- NOVAMETRIX
MEDICAL SYSTEMS INC. (NASDAQ: NMTX) and ANDROS INC. jointly announced today that
they have executed a definitive merger agreement pursuant to which Novametrix
will acquire all of the outstanding common stock of Andros, a subsidiary of
Genstar Capital Partners II, L.P.
Under the merger agreement, which has been unanimously approved by the
Boards of Directors of both companies, Novametrix will issue to the stockholders
of Andros and reserve for issuance to option and warrant holders of Andros, the
following: (i) shares of Novametrix Common Stock constituting 45 percent of the
combined company at closing, and (ii) anti-dilution rights enabling the holders
to maintain, without additional payment, such 45 percent ownership level as
Novametrix options and warrants outstanding at closing are exercised.
The transaction will create a world leader in the field of gas monitoring
products and sensor technology for medical applications. The combined company,
which will retain the Novametrix name, would have sales of $67.0 million for the
fiscal year ended April 28, 1996, on a pro forma basis, as compared to
Novametrix' stand-alone sales of $25.3 million for the same period.
Approximately two-thirds of the combined company's revenues are expected to come
from the sale of medical related products.
Both Novametrix and Andros specialize in non-dispersive infrared gas
analysis technology, Novametrix having historically applied its technology to
medical instrumentation and Andros having applied its technology to both medical
instrumentation and environmental/automotive diagnostic products. The combined
company will have significant technological synergies and will expand the market
for each company's products and technologies to the combined customer base.
Andros' technology for monitoring anesthetic agents complements Novametrix'
technology for monitoring oxygen and carbon dioxide and respiratory mechanics.
In addition, there are significant opportunities to apply Novametrix'
technologies to Andros' automotive and environmental instrumentation businesses.
William J. Lacourciere, president and CEO of Novametrix, will continue as
the president and chief executive officer of the combined company, and Richard
D. Paterson, a managing director of Genstar and chairman of Andros, will be the
chairman of the Board of Directors.
Lacourciere stated that "the merger will nearly triple the revenues of
Novametrix and should result in substantial earnings accretion for the
Novametrix stockholders, even before taking into account efficiencies and cost
savings which we believe can be achieved
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1 BARNES INDUSTRIAL PARK ROAD * P.O. BOX 690 * WALLINGFORD, CT 06492
USA * 203-265-7701 * FAX 203-284-0753
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after the merger. In addition, the merger will broaden and strengthen our
technology base, providing additional leverage with national accounts, and will
result in diversification of our markets." Lacourciere continued, "Andros is a
natural fit with Novametrix, with the combination providing many complementary
technologies and a world-class customer base, including the world's major
manufacturers of medical monitoring equipment. Novametrix will become the
world's largest OEM supplier of gas monitoring products for medical
applications. Also, we welcome Genstar as a partner in our ongoing effort to
maximize shareholder value."
Paterson stated that "the merger of Novametrix and Andros will create a
larger and more efficient manufacturer and marketer of medical patient
monitoring equipment. The merger broadens and further enhances the already close
relationships each company has with a customer base composed of some of the most
respected OEMs in the medical products industry. Moreover, we believe there are
significant synergies between the two companies' infrared technology development
groups that will accelerate the combined company's development of leading edge
products for their respective markets. Bill Lacourciere is a strong manager and
motivator of people and is uniquely qualified to lead the combined technology
company. Novametrix' reputation for the quality of its products and services and
the excellence of its technologies should enhance the ability of the combined
company to compete in the medical, automotive and environmental instrumentation
markets. Genstar is enthusiastic about its proposed investment in the combined
company and looks forward to working with management to enhance the value of the
combined company."
The merger, which is subject to customary closing conditions, including the
approval of the shareholders of Novametrix, lenders' consents, and the
expiration of the Hart-Scott-Rodino waiting period, is expected to close during
Novametrix' fiscal quarter ending October 27, 1996. The merger agreement
provides for each party to pay a termination fee of $3 million under certain
circumstances. Tucker Anthony Incorporated has served as financial advisor to
Novametrix and has delivered an opinion that the transaction consideration is
fair to Novametrix from a financial point of view.
This press release contains forward looking information about the combined
company's projected operating results for fiscal 1996 and the combined company's
plans for achieving such results. The combined company's ability to achieve its
projected results is dependent on a variety of factors, many of which are
outside management's control. Some of the most significant factors, alone or in
combination, would be the failure to integrate the businesses of Novametrix and
Andros successfully, and unanticipated slowdown in the health care, automotive
or environmental industries (as a result of cost containment measures, changes
in government regulation or other factors), unanticipated technological
developments which affect the competitiveness of the combined company's
products, or the unanticipated loss of business. Accordingly there can be no
assurance that the combined company will achieve its projected operating
results.
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Novametrix is a designer, developer, manufacturer and marketer of medical
electronic instruments and sensors which non-invasively and continuously assess
a critically ill patient's oxygen, carbon dioxide and respiratory mechanics.
Novametrix' products are used in operating rooms, intensive care units,
respiratory care departments, emergency rooms and inter-and intra-hospital
patient transport.
Andros is a supplier of instrumentation and a leading worldwide designer
and supplier to original equipment manufacturers of non-dispersive infrared gas
analyzers. Andros sells its products to manufacturers of medical monitoring
equipment, automobile and environmental diagnostic equipment, and end users of
its spectrum analysis instruments.
Genstar Capital Partners II, L.P. is a private investment fund that
concentrates on acquisitions of manufacturing and services businesses.
CONTACT: Novametrix Medical Systems Inc., Wallingford
William J. Lacourciere, 800/243-3444
or
Genstar Capital Partners II, L.P./Andros Inc., Berkeley
Richard D. Paterson, Jean-Pierre L. Conta,
415/286-2350
