SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 1, 1997
REHABILICARE INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 0-9407 41-0985318
(STATE OR OTHER (COMMISSION FILE (I.R.S.
JURISDICTION OF NUMBER) EMPLOYER
INCORPORATION) IDENTIFICATION NO.)
1811 OLD HIGHWAY EIGHT, NEW BRIGHTON, MN 55112-3493
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 631-0590
(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT.)
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Item 5. Other Events
On December 2, 1997, Rehabilicare Inc. published the news release
attached hereto as Exhibit 20 and incorporated herein by reference, announcing
that it had signed an agreement to merge pursuant to which, and subject to the
conditions contained therein, Rehabilicare would acquire Staodyn, Inc., a
Delaware coporation located in Longmont, Colorado, and each holder of common
stock of Staodyn, Inc. would receive .829 shares of the common stock of
Rehabilicare Inc.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
20. Press Release
SIGNATURES
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.
REHABILICARE INC.
By /s/ DAVID B. KAYSEN
David B. Kaysen
Chief Executive Officer and
President
Dated: December 4, 1997
Exhibit 20
Rehabilicare and Staodyn Announce Definitive Agreement to Merge
NEW BRIGHTON, Minn. and LONGMONT, Colo., Dec. 2 /PRNewswire/ -- Rehabilicare
Inc. (Nasdaq: REHB) and Staodyn, Inc. (Nasdaq: SDYN) announced today that they
have signed a definitive agreement to merge, forming an international
electromedical pain management and rehabilitation company with combined revenues
of over $30 million. Under the terms of the agreement, each share of Staodyn
common stock will be exchanged for .829 shares of Rehabilicare common stock. The
transaction is valued at approximately $23 million at the December 1 closing
price of Rehabilicare common stock. The transaction is expected to be accounted
for as a pooling-of-interests and to be treated as a tax-free exchange. It is
subject to approval by the shareholders of both companies, and other customary
closing conditions. Completion is expected during the first quarter of calendar
1998, which is Rehabilicare's third fiscal quarter.
David B. Kaysen, President and CEO of Rehabilicare, said that Rehabilicare
anticipates that the merger will be accretive to earnings per share in
Rehabilicare's first full fiscal year ending June 30, 1999 after the merger.
Rehabilicare also estimates that it will incur one-time charges and related
adjustments of approximately $2.5-3.5 million in the period immediately
following the merger representing transaction costs and other costs related to
the merger, Mr. Kaysen added.
Rehabilicare designs, manufactures and provides electromedical pain
management and rehabilitation products and services used for clinical, home
health care and occupational medicine applications. Staodyn also develops
electrotherapy devices and accessories. Its core business consists of TENS
(Transcutaneous Electrical Nerve Stimulation) devices used for the relief of
chronic and acute pain, NMES (Neuromuscular Electrical Stimulation) devices used
in physical therapy and sports medicine for muscle reeducation and
rehabilitation, and PDCS (Pulsed Direct Current Stimulation) devices used in
sports medicine and wound care to promote healing of soft tissue injuries.
Staodyn is headquartered in Longmont, Colo. and has a patient support group
located in Tampa, Fla. They employ over 175 individuals in the two sites. The
company's products are sold in the U.S. through a national sales organization
and through wholesale DME (Durable Medical Equipment) dealers. Internationally,
Staodyn products are distributed in Canada and western Europe through a network
of medical product distributors. Staodyn's unaudited revenues for the fiscal
year ended November 30, 1997 are approximately $21 million.
"We expect the combination of our two organizations to produce numerous
benefits for our patients, health care providers and other customers as well as
for all of our shareholders," Mr. Kaysen stated. Mr. Kaysen went on to say, "The
combination of these two organizations creates a powerful entity with the
necessary critical mass to have a substantial impact on our industry. We will
have an extremely broad product line of high-quality TENS and NMES
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units as well as the largest line of specialty rehabilitation products in the
industry. Rehabilicare's IFII and GVII units are focused on the rehabilitation
market while our CTDx is aimed at the large market for repetitive stress
injuries of the wrist and elbow. Rehabilicare's newest product, the OrthoDx is
being marketed into the very large post-surgical knee market. Staodyn's SporTX
is a tremendous product for a wide range of sports related injuries. By
combining this broad line of electrotherapy devices with an extensive family of
accessories, our new organization will be able to serve a large and growing
marketplace."
John R. South, President and CEO of Staodyn, Inc. said, "The merger of
Staodyn into Rehabilicare will help to realize the full potential of these two
strong business organizations, while advancing the capacity of both
organizations to service our marketplace with high quality and innovative
products."
Mr. Kaysen will remain President and CEO of the combined organization, with
the corporate headquarters to be located in New Brighton, Minn. In addition,
Bayne Gibson and Fred Ayers, currently board members of Staodyn, will be joining
the board of Rehabilicare.
Statements in this press release which are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. The words or phrases "anticipates," "estimates,"
"expect," or expressions of a similar nature denote forward looking statements.
Those statements are subject to considerable risks and uncertainties, including
the risk that shareholder approval of the merger might not be obtained or that
other contingencies set forth in the merger agreement are not satisfied, the
substantial risks inherent in combining two publicly held corporations without
losing personnel, sales channels or customers, and the risks associated with the
ongoing businesses of each of the constituent corporations, as outlined in their
filings (including their 10-KSB filings) with the Securities and Exchange
Commission.
