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
July 23, 1997
Mallinckrodt Inc.
(Exact name of registrant as specified in its charter)
New York 1-483 36-1263901
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
7733 Forsyth Boulevard, St. Louis, MO 63105-1820
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, (314) 854-5200
including area code
<PAGE>
Item 5. Other Events
A press release was issued July 23, 1997. The relevant portion of
the text of that release was as follows.
MALLINCKRODT ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE NELLCOR
PURITAN BENNETT FOR $1.9 BILLION
Combined companies will be premier supplier to healthcare providers
worldwide
ST. LOUIS, Mo., July 23, 1997 - In an action designed to create one
of the world's premier medical products suppliers, Mallinckrodt Inc.
(NYSE:MKG) and Nellcor Puritan Bennett Incorporated (NASDAQ:NELL)
today announced the execution of a definitive agreement whereby
Mallinckrodt would purchase for cash all outstanding shares of
Nellcor Puritan Bennett common stock for $28.50 per share. This
represents a 36 percent premium to today's Nellcor closing price of
$20.94. Mallinckrodt's stock closed today at $39.75 a share.
Under the terms of the merger agreement, unanimously approved
today by the boards of both of the companies, Mallinckrodt will
initiate a tender offer for all of the outstanding shares of Nellcor
Puritan Bennett to commence within five business days. Once
initiated, the offer will be open for 20 business days unless further
extended. Mallinckrodt's tender offer is conditioned upon, among
other things, there being validly tendered and not withdrawn a number
of shares that equals at least a majority of the outstanding shares
of Nellcor Puritan Bennett. After the consummation of the tender
offer, Mallinckrodt has agreed to acquire any of the remaining
outstanding shares of Nellcor pursuant to a second-step merger in
which holders of such shares will receive $28.50 a share. It is
anticipated that the proposed merger will be accounted for using
purchase accounting.
Nellcor Puritan Bennett is the world leader in providing
products that monitor, diagnose and treat the respiratory-impaired
patient in every setting from the hospital to the home. Products
include devices that aid in sleep diagnosis, oxygen monitoring, apnea
monitors, critical care ventilators, oxygen concentrators, and
anesthetic gases.
Mallinckrodt holds leading market positions worldwide in
numerous hospital product lines, including x-ray contrast media,
radiopharmaceuticals and devices for diagnostic imaging; endotracheal
and tracheostomy tubes; and temperature management systems.
Mallinckrodt also is the world's leading producer of acetaminophen
and narcotic analgesics.
The combined companies will have revenues of approximately $2.4
billion for the year ended June 30, 1997. Mallinckrodt will have
three attractive growth platforms in healthcare - a $1.1 billion
critical care business serving the respiratory impaired patient, a
$900 million medical imaging business, and a $400 million specialty
pharmaceutical business. Both companies have fiscal years ending in
the second calendar quarter.
In a joint statement, C. Ray Holman and C. Raymond Larkin, Jr.,
Mallinckrodt and Nellcor's chief executive officers, respectively,
noted that the benefits of the proposed merger offer meaningful
opportunities for growth and achievement of global leadership in a
rapidly changing healthcare environment.
"Nellcor Puritan Bennett is an excellent strategic fit with
Mallinckrodt's critical care business," said Holman. "Nellcor's
world leadership positions in oxygen monitoring, critical care
ventilation and other respiratory products combine with
Mallinckrodt's world leadership positions in airway management
disposables and other critical care products to form by far the
largest organization in this field of medicine. The combined company
represents an even more significant supplier that meets essential
healthcare needs: medical diagnosis, management of patients in
critical care settings, and management of pain. Mallinckrodt and
Nellcor will be well positioned to provide innovative, cost-effective
products for our healthcare customers."
Larkin said, "We have great respect for Mallinckrodt and its
long history of serving healthcare markets. It was only two years
ago that Nellcor and Puritan-Bennett came together to create one of
the world's 15 largest medical device companies. We have gained
significant advantages together. We believe our businesses will be
strengthened even more through the addition of the Mallinckrodt
critical care unit." Larkin will become executive vice president of
Mallinckrodt and will be president and chief executive officer of the
Nellcor Puritan Bennett subsidiary, taking responsibility for the
combined critical care unit and reporting directly to Holman.
Holman said the acquisition of Nellcor represents the
culmination of a significant effort by Mallinckrodt to expand its
core medical products business during a period of industry
consolidation. "Mallinckrodt expects to benefit from the merger
through enhanced revenue growth and through consolidation synergies,
cost reductions and other benefits to be implemented during the
balance of fiscal 1998. Based on our expectations for revenues and
synergies, we would expect the transaction to be accretive to
earnings per share in fiscal year 1999."
In the past fiscal year, Mallinckrodt divested its animal health
business and sold its interest in the Tastemaker flavors joint
venture. Proceeds from those transactions, along with borrowings of
approximately $1.6 billion under a credit agreement entered into with
J.P. Morgan, Goldman, Sachs & Co. and Citibank in connection with the
transaction are being used for the tender offer. The previously
announced share repurchase program continues in effect.
Goldman, Sachs & Co. advised Mallinckrodt, provided a fairness
opinion to the Board of Directors, and is acting as dealer manager
for the tender offer. Morgan Stanley & Co. Incorporated advised
Nellcor Puritan Bennett and provided a fairness opinion to the Board
of Directors of Nellcor Puritan Bennett.
Nellcor Puritan Bennett is the worldwide leader in providing
products for monitoring, diagnosing and treating the respiratory-impaired
patient across the continuum of care. The company's web
site address is (www.nellcorpb.com).
Mallinckrodt Inc. serves healthcare and specialty chemicals
markets worldwide. The company is a major producer of diagnostic
imaging agents, medical devices, analgesic pharmaceuticals,
catalysts, and laboratory and microelectronic chemicals. The St.
Louis, Missouri-based company, with fiscal 1996 adjusted net sales of
$1.75 billion, sells more than 1,000 products in more than 100
countries. The Mallinckrodt web site address is
(www.mallinckrodt.com).
# # #
This news release contains forward-looking statements, including
statements concerning the projected impact of the proposed merger on
Mallinckrodt's earnings results and sales growth. These statements
are based on current expectations; actual results may differ
materially. Among the factors that could cause actual results to
differ materially are the following: the effect of business and
economic conditions; the impact of competitive products and continued
pressure on prices realized by Mallinckrodt for its products; market
acceptance issues, including the failure of new products to generate
anticipated sales levels; difficulties or delays in receiving
required governmental or regulatory approvals; the cost and effect of
legal and administrative proceedings; and the other risk factors
reported from time to time in Mallinckrodt's filings with the
Securities and Exchange Commission.
Mallinckrodt Inc.
ROGER A. KELLER
Vice President, Secretary
and General Counsel
DATE: July 24, 1997
