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
Date of Report (Date of earliest event reported): November 30, 1998
Medtronic, Inc.
(Exact name of Registrant as Specified in its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
1-7707 41-0793183
(Commission File Number) (IRS Employer
Identification No.)
7000 Central Avenue N.E.
Minneapolis, Minnesota 55432-3576
(Address of Principal Executive Offices and Zip Code)
(612) 514-4000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events
On November 30, 1998, the Registrant issued a press release announcing
the signing of an agreement to merge with Arterial Vascular Engineering, Inc.
("AVE"). Subject to the terms and conditions of the merger agreement, shares of
AVE will be converted into shares of the Registrant pursuant to the conversion
ratio set forth therein and described in the press release. The full text of the
press release is set forth in Exhibit 99 attached hereto and is incorporated in
this Report as if fully set forth herein.
Item 7. Financial Statements and Exhibits
Exhibit 99. Press release dated November 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDTRONIC, INC.
By /s/ Robert L. Ryan
Date: December 3, 1998 Robert L. Ryan
Senior Vice President and Chief
Financial Officer
<PAGE>
EXHIBIT INDEX
Medtronic, Inc.
Form 8-K Current Report
Dated December 3, 1998
Exhibit Number Description
99 Press release dated November 30, 1998
Exhibit 99
Contacts:
Chris O'Connell
Investor Relations
612/514-4971
Jessica Stoltenberg
Public Relations
707/541-3207
F O R I M M E D I A T E R E L E A S E
MEDTRONIC AND ARTERIAL VASCULAR ENGINEERING TO MERGE, FORMING WORLD-LEADING
FRANCHISE IN INTERVENTIONAL CARDIOLOGY
MINNEAPOLIS, MN AND SANTA ROSA, CA, November 30, 1998 -- Medtronic,
Inc. (NYSE:MDT) and Arterial Vascular Engineering, Inc. (AVE) (Nasdaq National
Market:AVEI) today announced that they will merge to form one of the world's
leading interventional cardiology franchises in a transaction valued at $3.7
billion. AVE's strong position in interventional cardiology will complement
Medtronic's market-leading positions in the cardiac rhythm management, cardiac
surgery, and neurological and spinal surgery fields.
The agreement calls for Medtronic to exchange $54.00 in Medtronic stock
for each share of AVE stock, in a pooling of interests transaction. The
agreement is subject to certain collar provisions and customary closing
conditions.
"We are extremely pleased to be merging with AVE, as it provides the
opportunity we have been seeking to move into a leadership role in the
interventional field," said William W. George, chairman and chief executive
officer of Medtronic. "During the past several years, under the direction of CEO
Scott Solano, AVE has built itself into the world's leading cardiac stent
company. The company's recent acquisition of the USCI interventional cardiology
business of C.R. Bard and its pending merger with World Medical Manufacturing
Corporation have broadened AVE's product lines. When combined with Medtronic's
interventional business, AVE will give us a broad array of outstanding
interventional products, one of the strongest development pipelines in the
industry, and a very deep intellectual property portfolio. The combined
Medtronic AVE vascular business will generate more than $1 billion in revenues
next fiscal year, with tremendous growth potential over the next ten years."
Scott Solano, AVE chairman and chief executive officer said, "The
merger with Medtronic will substantially enhance our position in the
interventional field. Medtronic has developed its own portfolio of some very
competitive balloon and guide catheter technology, as well as an excellent
endovascular stent graft. In addition, they have developed and licensed a broad
intellectual property portfolio which, combined with our own, will give us an
extensive patent foundation moving forward."
<PAGE>
Solano added, "By combining the technology, service and dedication of
the two companies, we will be able to meet all the needs of the physicians in
the catheterization lab. AVE is well-positioned for future growth with a rapidly
escalating R&D budget and a strong culture of innovation."
AVE designs and manufactures minimally invasive solutions for the
treatment of coronary artery and peripheral vascular disease and is the global
technology leader in coronary stents. Its product offerings include coronary
stents, balloon catheters, guidewires and guiding catheters. Founded in 1991,
AVE has about 4,000 employees.
Solano will report directly to Medtronic's President and Chief
Operating Officer, Art Collins, and will assume responsibility for the combined
vascular businesses of Medtronic and AVE, headquartered in Santa Rosa, Calif.
"In addition, the vascular field sales and service forces of the two companies
will be merged into a single unit in each geography, and the operations and
facilities will be streamlined to gain additional synergy and operational
efficiency," Collins said.
For Medtronic, AVE is the fifth major transaction announced since July
1998, all in its core cardiovascular and neurological and spinal surgery
businesses. Its total investment in these mergers is $8 billion. The others
include:
Sofamor Danek Group, Inc., Memphis, TN - Spinal and neurological surgery
Physio-Control International Corp., Redmond, WA External defibrillators
Avecor Cardiovascular Inc., Minneapolis, MN Cardiac surgery products
Midas Rex, L.P., Ft. Worth, TX Neurological surgery
"These five mergers transform Medtronic into a truly unique corporation
in the medical technology field, with anticipated revenues exceeding $5 billion
in our next fiscal year, almost double our FY98 size," said George "When
combined with the breakthrough new products we have developed internally, such
as the Gem(TM) DR dual chamber defibrillator and the Medtronic.Kappa(TM) 700
series of adaptive pacemakers, these mergers put Medtronic in a position of
global market leadership in medical technologies used to treat all aspects of
cardiac disease as well as those used in neurological and spinal surgery. As a
result of these mergers, Medtronic can now offer our hospital and physician
customers superior products providing a wide array of cardiovascular and
neurological therapies."
Medtronic said that, aside from transaction-related charges, the merger
will be significantly accretive to earnings this year and in future years. The
company said it will reinvest a significant portion of the incremental earnings
into R&D and market development to accelerate future growth of all of its
product lines. The company expects to spend more than $500 million on R&D in its
coming fiscal year.
<PAGE>
The $54 per share merger price stated above applies if Medtronic's
average common stock price for the 15 NYSE trading days ending on and including
the second NYSE trading day preceding the AVE shareholders' meeting on the
merger is between $61.20 and $74.80 per share. If such average is within this
range, then each AVE share will be exchanged for Medtronic shares with a value
of $54. If such average Medtronic stock price is equal to or greater than
$74.80, then each AVE share will be exchanged for 0.72193 Medtronic shares, and
if it is equal to or less than $61.20, then each AVE share will be exchanged for
0.88235 Medtronic shares.
The transaction is subject to customary conditions, including approval
by shareholders of AVE and Hart-Scott-Rodino clearance. The companies expect to
complete the transaction in 90 to 120 days.
Medtronic, Inc., headquartered in Minneapolis, is the world's leading
medical technology company specializing in implantable and interventional
therapies. Its Internet address is www.medtronic.com.
- -0-
Any statement made about the company's anticipated financial results are
forward-looking statements subject to risks and uncertainties such as those
described in the company's Annual Report on Form 10K for the year ended April
30, 1998. Actual results may differ materially from anticipated results.
