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November 13, 2000
Philips to acquire ADAC Laboratories in $426 million transaction
Amsterdam, the Netherlands, and Milpitas, California, U.S.A. -- November 13,
2000: Royal Philips Electronics (AEX: PHI, NYSE: PHG) and ADAC Laboratories
(NASDAQ: ADAC) announced today that Philips has agreed to acquire all of ADAC
Laboratories' common stock for approximately $426 million, or $18.50 per share
for each outstanding share of ADAC Laboratories' common stock.
The transaction will be a cash tender offer followed by a cash merger to acquire
any shares not previously tendered. Philips expects to commence its cash tender
offer on Tuesday November 14. ADAC Laboratories' Board of Directors has
unanimously determined that the tender offer and the merger are advisable and in
the best interest of ADAC Laboratories' shareholders and unanimously recommends
that ADAC Laboratories' shareholders tender their shares pursuant to the tender
offer.
The acquisition will enable Philips Medical Systems, a leader in diagnostic
imaging and related services, to offer healthcare providers worldwide an even
broader range of systems to diagnose and treat diseases, such as cardiovascular
disease and cancer.
ADAC Laboratories is a worldwide market leader in nuclear medicine imaging
equipment and radiation therapy planning systems. The company offers a broad
range of nuclear medicine systems
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that are used primarily in the diagnosis of heart disease and cancer. In
addition, ADAC Laboratories is an emerging leader in the positron emission
tomography (PET) imaging market. PET provides physicians with solutions for
accurate cancer disease management. The market for PET systems has grown
dramatically in the past year due to expanded Medicare reimbursement, and the
widespread acceptance of PET in the U.S.A. for cancer diagnosis, staging and
treatment follow-up.
Philips Medical Systems is a leader in diagnostic imaging and related services
and offers a robust portfolio, including Catherization Labs, MR, CT, X-ray, and
ultrasound systems, as well as information technology solutions that address the
radiology, general imaging, surgical and cardiovascular markets.
Hans Barella, President and CEO of Philips Medical Systems commented, "We
believe that the acquisition of ADAC Laboratories is an important addition to
the portfolio of activities of Philips Medical Systems. ADAC Laboratories has an
excellent reputation in the markets which it serves. The addition of ADAC
Laboratories will broaden the scope of products and services we can offer
healthcare providers. In Cardiology, one of our focus areas, this acquisition
will significantly complement our HeartCare program since Nuclear Medicine is
one of the important tools clinicians rely on to assess cardiovascular disease."
R. Andrew Eckert, ADAC Laboratories' Chairman and Chief Executive Officer,
stated, "We are extremely pleased to join Philips Medical Systems. Like ADAC
Laboratories, Philips Medical Systems has a
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strong reputation for excellence and innovation. The merging of our two
companies will strengthen both the breadth and depth of the products and
services we can offer to healthcare providers. Our customers will also benefit
from the increased resources we will have available for product development. In
addition, Philips Medical Systems' distribution strength will allow us to grow
our global presence significantly. Together, we believe ADAC Laboratories and
Philips Medical Systems will have the strength and capabilities to become the
world's premier healthcare solutions company, dedicated to improving the quality
of patient care."
The cash tender offer is subject to Philips acquiring at least 90% of all
outstanding ADAC Laboratories' shares calculated on a fully diluted basis in
accordance with the merger agreement. However, if more than 50% but fewer than
90% of such shares are tendered into the offer, Philips will under certain
circumstances reduce the number of shares subject to the offer to 49.9% of the
outstanding shares and subsequently pursue a merger with ADAC Laboratories. The
offer is also subject to the receipt of customary regulatory approvals and other
customary conditions.
ADAC Laboratories' revenues for its fiscal year 2000, ended October 1, 2000,
were $324.4 million. Its net income for continuing operations before
non-ordinary charges was $15.7 million. The company employs more than 900
people; its headquarters and principal manufacturing facility are in Milpitas,
California.
For further information:
Ben Geerts, Philips Corporate Communications, tel: +31 20 5977215
Linda Snyder, ADAC Laboratories, tel: +1 408 468 3750
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ADAC LABORATORIES' SHAREHOLDERS ARE ADVISED TO READ THE TENDER OFFER STATEMENT
REGARDING THE BUSINESS COMBINATION BETWEEN ADAC LABORATORIES AND PHILIPS
REFERRED TO IN THE NEWS RELEASE ABOVE, WHICH WILL BE FILED BY PHILIPS HOLDING
USA INC. AND PHILIPS MEDICAL ACQUISITION CORPORATION, WHOLLY-OWNED SUBSIDIARIES
OF PHILIPS, WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION, AND THE RELATED
SOLICITATION/RECOMMENDATION STATEMENT THAT WILL BE FILED BY ADAC LABORATORIES
WITH THE COMMISSION. THE TENDER OFFER STATEMENT (INCLUDING AN OFFER TO PURCHASE,
LETTER OF TRANSMITTAL AND RELATED TENDER OFFER DOCUMENTS) AND THE
SOLICITATION/RECOMMENDATION STATEMENT WILL CONTAIN IMPORTANT INFORMATION THAT
SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE TENDER
OFFER. THESE DOCUMENTS WILL BE MADE AVAILABLE TO ALL HOLDERS OF ADAC
LABORATORIES COMMON STOCK AT NO EXPENSE TO THEM. THESE DOCUMENTS ALSO WILL BE
MADE AVAILABLE AT NO CHARGE AT THE SEC WEB SITE AT WWW.SEC.GOV. THE PRESS
RELEASE ABOVE IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER TO
SELL SECURITIES OF ADAC LABORATORIES. THE TENDER OFFER WILL BE MADE SOLELY BY AN
OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL TO BE DISSEMINATED UPON THE
COMMENCEMENT OF THE TENDER OFFER.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
US SECURITIES ACT, INCLUDING STATEMENTS REGARDING THE PROPOSED ACQUISITION OF
ADAC LABORATORIES BY PHILIPS AND THE FUTURE BENEFITS OF THIS TRANSACTION.
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO,
RISKS RELATED TO THE PLANNED ACQUISITION INCLUDING THE INABILITY TO CLOSE THE
PLANNED TRANSACTION OR TO ACHIEVE EXPECTED SYNERGIES;
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THE SUCCESSFUL INTEGRATION AND MARKET ACCEPTANCE OF THE PRODUCT TECHNOLOGIES;
AND OTHER FACTORS AS DESCRIBED IN THE "BUSINESS CONSIDERATIONS" SECTION OF ADAC
LABORATORIES' MOST RECENT FORM 10-Q FOR THE FISCAL QUARTER ENDED JULY 2, 2000.
ALL FORWARD-LOOKING STATEMENTS ARE BASED ON INFORMATION AVAILABLE TO THE COMPANY
ON THE DATE HEREOF, AND THE COMPANIES ASSUME NO OBLIGATION TO UPDATE SUCH
STATEMENTS.
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