Exhibit 99.1
SENIOR MANAGERS, PARK AVENUE EQUITY PARTNERS AND VESTAR CAPITAL PARTNERS
AGREE TO ACQUIRE SUNRISE MEDICAL, INC. FOR $10.00 PER SHARE
Carlsbad, CA -October 17, 2000 -Sunrise Medical, Inc. (NYSE: SMD) announced
today the signing of a definitive merger agreement that provides for the
acquisition of the Company for $10.00 per share in cash by an investor group
that includes current President and CEO Michael N. Hammes and other senior
managers of the Company and affiliates of Park Avenue Equity Partners and
Vestar Capital Partners.
Under the terms of the agreement, a corporation recently formed by the
investor group will make a tender offer to purchase all currently outstanding
shares of common stock of Sunrise Medical at a price of $10.00 per share in
cash. The offer price represents a premium of approximately 79% over the
average per share closing price of Sunrise Medical's common stock during the
past 60 trading days.
The agreement was approved unanimously by Sunrise Medical's Board of
Directors based on the unanimous recommendation of a Special Committee of the
Board composed solely of outside Directors. The Special Committee was advised
by Deutsche Banc Alex. Brown (which identifies the U.S. investment banking
activities of DB Alex. Brown LLC, formerly BT Alex. Brown, Inc., and Deutsche
Bank Securities, Inc. which are indirect subsidiaries of Deutsche Bank AG)
and Batchelder & Partners, Inc., each of which delivered an opinion that the
transaction is fair from a financial point of view to Sunrise Medical's
stockholders.
Bankers Trust Company, a wholly-owned subsidiary of Deutsche Bank AG,
the Company's existing lender, has committed, subject to customary
conditions, to provide $215 million in bank debt and $40 million in
subordinated debt financing to fund the acquisition, refinance existing
indebtedness and for general corporate purposes. Affiliates of Park Avenue
Equity Partners and Vestar Capital Partners have committed, subject to
customary conditions, to provide the remaining funds necessary to complete
the transaction.
The offer is conditioned on the tender of a sufficient number of shares
to give the investor group ownership of at least a majority of the
outstanding shares of common stock of the Company on a fully diluted basis,
the availability of the financing necessary to complete the transaction, and
other customary conditions and regulatory approvals.
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Bill Mayer, Park Avenue's senior partner said, "We are excited by the
prospect of becoming partners with Sunrise Medical and Vestar. We are
impressed with Mike Hammes and his team at Sunrise Medical, and look forward
to supporting Sunrise Medical and its management."
Jim Elrod, a managing director of Vestar Capital Partners, said,
"Sunrise Medical is a leading worldwide manufacturer and marketer of high
quality medical equipment. The company's focus on providing high value-added
products through superior design and innovation has resulted in a tremendous
franchise with well-recognized brand names. We are extremely pleased to be
joining with the management team of Sunrise Medical, and with Bill Mayer, an
old friend from First Boston, and his team at Park Avenue, in making this
long-term investment."
The tender offer, which is expected to commence within 10 business days
and remain open initially for 20 business days, unless extended, will be
followed by a second step merger in which those shares not tendered will be
converted into the right to receive the same $10.00 per share in cash.
Following completion of the tender offer, the investor group will be entitled
to designate a majority of the Board of Directors of Sunrise Medical. If 90%
of the outstanding shares of Sunrise Medical common stock are tendered and
purchased pursuant to the offer, the second step merger can be completed
thereafter without a vote or meeting of the Company's stockholders.
Since its founding in 1983, Sunrise Medical Inc. has grown to become one
of the world's largest manufacturers of homecare, extended care and assistive
technology products. Sunrise Medical had sales of $644 million in fiscal
2000. From its corporate headquarters in Carlsbad, California, Sunrise
Medical management oversees a global enterprise with 4,400 associates, 12
factories in North America and Europe, and Company-owned distribution
organizations in 15 countries. Sunrise Medical products are sold in more than
100 countries around the world, with non-U.S. customers accounting for 44% of
Company sales. The Company's stock is traded on the New York Stock Exchange
(Ticker Symbol: SMD). More information about the company is available at
http://www.sunrisemedical.com.
Park Avenue Equity Partners is a private equity fund specializing in
middle-market management buyouts and growth capital investments. Park
Avenue's focus is oriented towards partnering with companies that have
valuations between $50 million and $250 million. Park Avenue is an active
partner with management in building the value of its companies. Park Avenue
invests in a broad spectrum of industries throughout North America.
Vestar Capital Partners is a leading investment firm specializing in
management buyouts, recapitalizations and growth capital investments. Vestar
invests, as partners with management teams, in high quality, middle market
companies. Vestar's investment strategy is targeted toward companies with
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valuations in the $200 million to $2 billion range, encouraging their growth
and development in a highly entrepreneurial and rewarding environment. Since
the firm's founding in 1988, Vestar has completed over thirty investments in
companies with a total value exceeding $10 billion. These companies have
varied in size and geography, and span industries ranging from traditional
industrial and consumer products to higher growth telecommunications, media
and healthcare services companies. Vestar currently manages a committed
equity capital pool of approximately $4 billion. Vestar has offices in New
York City, Denver and Paris, France. More information about Vestar is
available at http://www.vestarcapital.com
This press release contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of the safe-harbor provisions
of federal securities laws. These forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ materially
from those expressed in the forward-looking statement.
Many of these risks and uncertainties relate to factors that are beyond
our ability to control or estimate precisely, such as future market and
economic conditions, the behavior of other market participants and the
actions of government regulators. These risk factors are detailed in Sunrise
Medical's publicly filed reports. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
of this press release. Sunrise Medical does not undertake any obligation to
publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date of these materials.
Sunrise Medical stockholders are advised to read the tender offer
statement regarding the acquisition referenced in this press release, which
will be filed with the Securities and Exchange 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
which should be read carefully before any decision is made with respect to
the offer. These documents will be made available to all stockholders of
Sunrise Medical at no expense to them, by contacting the information agent,
Mackenzie Partners, Inc. Stockholders please call (212) 929-5500 (collect)
or (800) 322-2885 or email to: [email protected]. These document
will also be available at no charge at the SEC's website at www.sec.gov.
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