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): JUNE 24, 1997
IVAX CORPORATION
4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33137
305-575-6000
<TABLE>
<CAPTION>
<S> <C> <C>
Incorporated under the laws of the Commission File Number I.R.S. Employer Identification Number
STATE OF FLORIDA 1-09623 16-1003559
</TABLE>
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 24, 1997, IVAX Corporation ("IVAX") completed the sale of all
of the outstanding shares of the capital stock of its wholly-owned subsidiary,
McGaw, Inc. ("McGaw"), to B. Braun Medical Inc. ("B. Braun"), an indirect
subsidiary of B. Braun Melsungen AG, pursuant to a Stock Purchase Agreement
dated May 30, 1997, as amended by an Assignment and Assumption Agreement and
Amendment No. 1 to Stock Purchase Agreement dated as of June 17, 1997 (the
"Agreement"). The parties agreed to make an election under the Internal Revenue
Code to treat the transaction as a sale of assets for federal income tax
purposes.
McGaw, which constituted IVAX' intravenous products business,
manufactures and markets a broad line of basic and specialty intravenous
solutions, irrigation solutions, intravenous administration sets, infusion
pumps, and other infusion supplies and equipment, primarily to hospitals and
alternate site healthcare locations in the United States and, through
independent distributors, in various foreign markets. Its operations accounted
for approximately 30%, 27% and 30% of IVAX' consolidated net revenues and
approximately 32%, 25% and 29% of IVAX' consolidated gross profits for the years
ended December 31, 1996, 1995 and 1994, respectively.
B. Braun paid $320 million in cash to IVAX at the closing for the
shares of McGaw, which amount is subject to certain post closing adjustments
based on an adjusted statement of net assets of McGaw, as of May 31, 1997.
Pursuant to the Agreement, B. Braun agreed, among other things, to pay IVAX (1)
up to an additional $80 million contingent upon the combined operating income of
McGaw and B. Braun, and (2) royalties and other payments based on McGaw's and B.
Braun's commercialization of McGaw's Duplex(TM) drug delivery system. Presently
under development, the Duplex(TM) system is a multi-compartment intravenous drug
delivery system designed for intravenous drugs which have limited stability
after mixing.
IVAX used the proceeds received at closing to pay off the entire
outstanding balance of its revolving line of credit.
The foregoing description of the Agreement is qualified in its entirety
by the full text of the Agreement which is included as Exhibit 2.1 and Exhibit
2.2 to this Current Report on Form 8-K and incorporated herein by reference.
EXCEPT FOR THE HISTORICAL MATTERS CONTAINED HEREIN, STATEMENTS IN THIS
CURRENT REPORT ON FORM 8-K ARE FORWARD LOOKING AND ARE MADE PURSUANT TO THE SAFE
HARBOR PROVISIONS OF THE SECURITIES LITIGATION REFORM ACT OF 1995. INVESTORS ARE
CAUTIONED THAT FORWARD LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES WHICH
MAY AFFECT THE COMPANY'S BUSINESS AND PROSPECTS, INCLUDING THE RISK THAT IVAX
MAY NOT RECEIVE FUTURE PAYMENTS RELATING TO THE MCGAW SALE, AND CERTAIN
ECONOMIC, COMPETITIVE, GOVERNMENTAL, TECHNOLOGICAL AND OTHER FACTORS DISCUSSED
IN IVAX' FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. IF THE COMBINED
OPERATING INCOME OF B. BRAUN AND MCGAW DOES NOT EXCEED CERTAIN LEVELS SPECIFIED
IN THE AGREEMENT, IVAX MAY NOT RECEIVE ALL OR A PORTION OF THE $80 MILLION IN
CONTINGENT PAYMENTS DESCRIBED ABOVE. IN ADDITION, THE RECEIPT BY IVAX OF
ROYALTIES AND OTHER PAYMENTS RELATED TO THE COMMERCIALIZATION OF THE DUPLEX(TM)
SYSTEM IS SUBJECT TO THE SUCCESSFUL DEVELOPMENT OF THE PRODUCT BY B. BRAUN,
APPROVAL OF APPLICABLE REGULATORY AUTHORITIES, AND SUCCESSFUL COMMERCIALIZATION
OF THE PRODUCT BY B. BRAUN. NEITHER THE OPERATING RESULTS OF B. BRAUN AND MCGAW
NOR THE SUCCESS OF THE DUPLEX(TM) SYSTEM ARE WITHIN THE CONTROL OF IVAX. THE
POST CLOSING ADJUSTMENT DESCRIBED ABOVE IS SUBJECT TO REVIEW BY B. BRAUN AND ITS
ACCOUNTANTS OF AN AUDITED BALANCE SHEET OF MCGAW AS OF MAY 31, 1997 TO BE
PREPARED BY IVAX' ACCOUNTANTS, AND THE ACTUAL AMOUNT OF THE ADJUSTMENT MAY BE
DIFFERENT THAN THE ESTIMATED AMOUNT SET FORTH IN THIS CURRENT REPORT ON FORM
8-K.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma financial information
1. Introduction to Unaudited Pro Forma Condensed
Financial Statements.
2. Unaudited Pro Forma Condensed Statement of Operations
for the three months ended March 31, 1997.
3. Unaudited Pro Forma Condensed Statement of Operations
for the year ended December 31, 1996.
4. Unaudited Pro Forma Condensed Statement of Operations
for the year ended December 31, 1995.
5. Unaudited Pro Forma Condensed Statement of Operations
for the year ended December 31, 1994.
6. Notes to Unaudited Pro Forma Condensed Statements of
Operations.
7. Unaudited Pro Forma Condensed Balance Sheet as of
March 31, 1997.
8. Notes to Unaudited Pro Forma Condensed Balance Sheet.
(c) Exhibits.
2.1 Stock Purchase Agreement, dated May 30, 1997, between
IVAX Corporation and B. Braun of America Inc.
(incorporated by reference to IVAX Corporation's
Current Report on Form 8-K dated May 30, 1997).
2.2 Assignment and Assumption Agreement and Amendment No.
1 to Stock Purchase Agreement, dated as of June 17,
1997, by and among IVAX Corporation, B. Braun of
America Inc. and B. Braun Medical Inc.
99.1 Press Release of IVAX Corporation relating to the
sale of McGaw.
<PAGE>
Introduction To Unaudited Pro Forma
Condensed Financial Statements
The following unaudited pro forma condensed financial statements
reflect IVAX Corporation ("IVAX") after giving effect to the sale of McGaw, Inc.
("McGaw") as if it had been consummated, with respect to the statement of
operations data, at the beginning of the periods presented, or, with respect to
the balance sheet data, as of the date presented.
The unaudited pro forma condensed financial statements are derived
from, should be read in conjunction with, and are qualified in their entirety by
reference to, the separate financial statements and notes thereto of IVAX
included in its most recent Annual Report on Form 10-K and Quarterly Report on
Form 10-Q, as filed with the Securities and Exchange Commission.
The unaudited pro forma condensed financial data have been included for
comparative purposes only and do not purport to be indicative of the results of
operations or financial position which actually would have been obtained if the
sale of McGaw had occurred at the beginning of the periods presented or as of
the date indicated or of the results of operations or financial position which
may be obtained in the future.
<PAGE>
<TABLE>
<CAPTION>
IVAX CORPORATION REFLECTING THE SALE OF MCGAW
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
(In thousands, except per share data)
IVAX PRO FORMA PRO FORMA
CORPORATION MCGAW ADJUSTMENTS BALANCE
----------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
Net revenues $ 284,550 $ (81,159) $ 575 (P1) $ 202,532
(1,434)(P2)
Cost of sales 182,985 (53,625) 575 (P1) 129,935
----------- ---------- ---------- ----------
Gross profit 101,565 (27,534) (1,434) 72,597
Operating expenses:
Sales & marketing 53,080 (12,842) -- 40,238
General & administrative 36,854 (6,479) -- 30,375
Research & development 16,873 (4,357) -- 12,516
Goodwill amortization 161 (20) -- 141
Amort. - other intangibles 1,845 (643) -- 1,202
Merger expenses 2,095 -- -- 2,095
----------- ---------- ---------- ----------
Total operating expenses 110,908 (24,341) -- 86,567
----------- ---------- ---------- ----------
Income (loss) from operations (9,343) (3,193) (1,434) (13,970)
Other income/(expense):
Net interest (expense)/income (7,151) (276) 5,000 (P3) (2,427)
Intercompany interest -- 252 (252) (P1) --
Other income (expense) 6,806 234 13 (P2) 7,053
----------- ---------- ---------- ----------
Total other income (expense) (345) 210 4,761 4,626
----------- ---------- ---------- ----------
Income (loss) before income taxes
and minority interest (9,688) (2,983) 3,327 (9,344)
Provision for income taxes (3,221) 240 1,164 (P4) (1,817)
----------- ---------- ---------- ----------
Income (loss) before minority interest (6,467) (3,223) 2,163 (7,527)
Minority interest (1,472) -- -- (1,472)
----------- ---------- ---------- ----------
Income (loss) from
continuing operations $ (7,939) $ (3,223) $ 2,163 $ (8,999)
=========== ========== ========== ==========
Income (loss) from continuing
operations per share $ (0.07) $ (0.07)
=========== ==========
Weighted average number
of common shares 121,479 121,479
=========== ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed statements of
operations
<PAGE>
<TABLE>
<CAPTION>
IVAX CORPORATION REFLECTING THE SALE OF MCGAW
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(In thousands, except per share data)
IVAX PRO FORMA PRO FORMA
CORPORATION MCGAW ADJUSTMENTS BALANCE
----------- --------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues $ 1,151,307 $(341,059) $ 1,649 (P1) $ 809,928
(1,969)(P2)
Cost of sales 774,368 (221,003) 1,649 (P1) 555,014
----------- --------- -------- -----------
Gross profit 376,939 (120,056) (1,969) 254,914
Operating expenses:
Sales & marketing 220,536 (54,341) -- 166,195
General & administrative 151,056 (22,291) -- 128,765
Research & development 73,353 (18,762) -- 54,591
Goodwill amortization 2,448 (77) -- 2,371
Amort. - other intangibles 7,668 (3,122) -- 4,546
Restructuring & impairments 117,983 (472) -- 117,511
Merger expenses 557 -- -- 557
----------- --------- -------- -----------
Total operating expenses 573,601 (99,065) -- 474,536
----------- --------- -------- -----------
Income (loss) from operations (196,662) (20,991) (1,969) (219,622)
Other income/(expense):
Net interest (expense)/income (24,451) 2,821 20,000 (P3) (1,630)
Intercompany interest -- 1,094 (1,094) (P1) --
Other income (expense) 5,564 871 304 (P2) 6,739
----------- --------- -------- -----------
Total other income (expense) (18,887) 4,786 19,210 5,109
----------- --------- -------- -----------
Income (loss) before income taxes
and minority interest (215,549) (16,205) 17,241 (214,513)
Provision for income taxes (62,224) 5,754 6,034 (P4) (50,436)
----------- --------- -------- -----------
Income (loss) before minority interest (153,325) (21,959) 11,207 (164,077)
Minority interest (5,354) -- -- (5,354)
----------- --------- -------- -----------
Income (loss) from
continuing operations $ (158,679) $ (21,959) $ 11,207 $ (169,431)
=========== ========= ========= ===========
Income (loss) from continuing
operations per share $ (1.31) $ (1.40)
=========== ===========
Weighted average number
of common shares 120,949 120,949
=========== ===========
</TABLE>
See accompanying notes to unaudited pro forma condensed statements of
operations
<PAGE>
<TABLE>
<CAPTION>
IVAX CORPORATION REFLECTING THE SALE OF MCGAW
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(In thousands, except per share data)
IVAX PRO FORMA PRO FORMA
CORPORATION MCGAW ADJUSTMENTS BALANCE
------------ ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Net revenues $ 1,259,766 $ (339,487) $ 1,006 (P1) $ 920,794
(491) (P2)
Cost of sales 736,036 (206,911) 1,006 (P1) 530,131
------------ ------------ --------- ----------
Gross profit 523,730 (132,576) (491) 390,663
Operating expenses:
Sales & marketing 181,427 (55,050) - 126,377
General & administrative 117,384 (29,846) - 87,538
Research & development 64,602 (16,005) - 48,597
Goodwill amortization 2,305 (70) - 2,235
Amort. - other intangibles 7,193 (4,587) - 2,606
Merger expenses 3,392 - - 3,392
------------ ------------ --------- ----------
Total operating expenses 376,303 (105,558) - 270,745
------------ ------------ --------- ----------
Income from operations 147,427 (27,018) (491) 119,918
Other income/(expense):
Net interest (expense)/income (17,380) 7,440 20,000 (P3) 10,060
Intercompany interest - 132 (132) (P1) --
Other income (expense) 18,394 (7,213) 8,129 (P1) 19,310
------------ ------------ --------- ----------
Total other income (expense) 1,014 359 27,997 29,370
------------ ------------ --------- ----------
Income (loss) before income taxes
and minority interest 148,441 (26,659) 27,506 149,288
Provision for income taxes 28,338 (752) 9,627 (P4) 37,213
------------ ------------ --------- ----------
Income before minority interest 120,103 (25,907) 17,879 112,075
Minority interest (5,302) -- -- (5,302)
------------ ------------ --------- ----------
Income from continuing operations $ 114,801 $ (25,907) $ 17,879 $ 106,773
============ ============ ========= ==========
Income (loss) from continuing
operations per share $ 0.96 $ 0.90
============ ==========
Weighted average number
of common shares 119,253 119,253
============ ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed statements of
operations
<PAGE>
<TABLE>
<CAPTION>
IVAX CORPORATION REFLECTING THE SALE OF MCGAW
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(In thousands, except per share data)
IVAX PRO FORMA PRO FORMA
CORPORATION MCGAW ADJUSTMENTS BALANCE
------------ ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Net revenues $ 1,134,806 $ (337,884) $ 35 (P1) $ 796,957
Cost of sales 653,361 (197,953) 35 (P1) 455,443
------------ ----------- --------- ---------
Gross profit 481,445 (139,931) -- 341,514
Operating expenses:
Sales & marketing 167,782 (56,697) -- 111,085
General & administrative 99,242 (22,493) -- 76,749
Research & development 48,661 (12,779) -- 35,882
Goodwill amortization 3,673 (64) -- 3,609
Amort. - other intangibles 8,212 (5,771) -- 2,441
Merger expenses 13,049 -- -- 13,049
------------ ----------- --------- ---------
Total operating expenses 340,619 (97,804) -- 242,815
------------ ----------- --------- ---------
Income from operations 140,826 (42,127) -- 98,699
Other income/(expense):
Net interest (expense)/income (19,425) 10,714 20,000 (P3) 11,289
Intercompany interest -- 108 (108) (P1) --
Other income (expense) 948 1,866 -- 2,814
------------ ----------- --------- ---------
Total other income (expense) (18,477) 12,688 19,892 14,103
------------ ----------- --------- ---------
Income (loss) before income taxes
and minority interest 122,349 (29,439) 19,892 112,802
Provision for income taxes 30,322 1,768 6,962 (P4) 39,052
------------ ----------- --------- ---------
Income before minority interest 92,027 (31,207) 12,930 73,750
Minority interest (2,155) -- -- (2,155)
------------ ----------- --------- ---------
Income from continuing operations $ 89,872 $ (31,207) $ 12,930 $ 71,595
============ =========== ========= =========
Income (loss) from continuing
operations per share $ 0.77 $ 0.62
============ =========
Weighted average number
of common shares 116,339 116,339
============ =========
</TABLE>
See accompanying notes to unaudited pro forma condensed statements of
operations
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED STATEMENTS OF OPERATIONS
1. The unaudited pro forma condensed statements of operations have been
prepared under the assumptions set forth in the following notes.
2. The pro forma results have been prepared for comparative purposes only
and do not purport to indicate what necessarily would have occurred had
McGaw been sold at the beginning of the periods presented, or what
results may be in the future.
3. IVAX figures have been restated to reflect the 1994 acquisitions of
Zenith Laboratories, Inc. and McGaw, each of which was accounted for
under the pooling of interests method of accounting. The March 1, 1996
acquisition of Elvetium S.A. (Argentina), Alet Laboratories S.A.E.C.I.
y E. and Elvetium S.A. (Uruguay), (collectively "Elvetium"), and the
September 30, 1995 acquisition of Pharmatop Limited which were
accounted for under the pooling of interests method of accounting, were
recorded as of January 1, 1996 and 1995, respectively. Historical
figures have not been restated to give retroactive effect to the
Elvetium and Pharmatop Limited acquisitions due to the immateriality of
the related amounts. IVAX figures include the results of the following
businesses acquired by purchase since the respective acquisition dates:
ImmunoVision, Inc. on July 17, 1995 and 60% of the shares of Galena
a.s., on July 25, 1994 (subsequently increased through open market
purchases to 74%.)
4. It is anticipated that nonrecurring transaction costs in the amount of
$3 million will be expensed as incurred in connection with the sale of
McGaw.
5. The following adjustments have been made to give pro forma effect for
the sale of McGaw:
(P1) To adjust for certain intercompany transactions included in
McGaw's results of operations.
(P2) To adjust for certain other transactions associated with the
intravenous division which will not continue as a result of
the sale of McGaw.
(P3) To reflect reduced interest expense incurred and increased
interest income earned from the proceeds from the sale of
McGaw.
(P4) To reflect the tax expense related to the above adjustments.
<PAGE>
<TABLE>
<CAPTION>
IVAX CORPORATION REFLECTING THE SALE OF MCGAW
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF MARCH 31, 1997
(In thousands, except per share data)
IVAX PRO FORMA PRO FORMA
CORPORATION MCGAW ADJUSTMENTS BALANCE
------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Cash $ 74,812 $ (4,019) $ 320,000 (B1) $ 70,793
(5,553) (B2)
(3,000) (B3)
(311,447) (B4)
Net accounts receivable 207,912 (38,341) -- 169,571
Inventory 271,124 (54,276) -- 216,848
Other current assets 136,579 (22,216) -- 114,363
------------ ---------- ---------- ----------
Total current assets 690,427 (118,852) -- 571,575
Property, plant and equipment, net 423,538 (192,054) 17,220 (B5) 248,704
Intangibles 98,523 (14,535) -- 83,988
Other assets 125,945 (41,367) (2,145) (B6) 82,433
------------ ---------- ---------- ----------
Total assets $ 1,338,433 $ (366,808) $ 15,075 $ 986,700
------------ ---------- ---------- ----------
Loans payable & current
long term debt $ 12,186 $ (261) $ -- $ 11,925
Accounts payable 77,556 (20,713) -- 56,843
(788) (B5)
Accrued expenses 127,435 (23,295) 2,000 (B7) 105,352
------------ ---------- ---------- ----------
Total current liabilities 217,177 (44,269) 1,212 174,120
Due to affiliates -- (7,440) 7,440 (B5) --
Long-term debt, net of
current portion 411,982 (541) (311,447) (B4) 99,994
Other long-term liabilities 17,073 (17,984) 17,949 (B5) 17,038
Minority interest 14,971 -- -- 14,971
3,347 (B8)
Total shareholders' equity 677,230 (296,574) 296,574 (B8) 680,577
------------ ---------- ---------- ----------
Total liabilities and
shareholders' equity $ 1,338,433 $ (366,808) $ 15,075 $ 986,700
============ ========== ========== ==========
Shares outstanding 121,483 121,483
============ ==========
Book value per share $ 5.57 $ 5.60
============ ==========
</TABLE>
See accompanying notes to unaudited pro forma condensed balance sheet
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED BALANCE SHEET
1. The unaudited pro forma condensed balance sheet has been prepared under
the assumptions set forth in the following notes.
2. The pro forma balance sheet has been prepared for comparative purposes
only and does not purport to indicate what necessarily would have
occurred had McGaw been sold as of the date presented, or what
financial position may be obtained in the future.
3. The following adjustments give pro forma effect for the sale of McGaw:
(B1) To reflect gross proceeds received from the sale of McGaw.
(B2) To reduce gross proceeds for anticipated post closing
adjustments.
(B3) To reflect payment of estimated transaction costs associated
with the sale.
(B4) To reflect the pay down of debt with the net proceeds
received.
(B5) To adjust for items included in McGaw's balance sheet that are
excluded from the sale based on the Agreement.
(B6) To write-off certain deferred tax assets related to assets
transferred to B. Braun Medical Inc.
(B7) To establish general reserves associated with transaction
related items.
(B8) To record the sale of McGaw and the resulting gain, assuming
that the closing had occurred on March 31, 1997, computed as
follows (in thousands):
<TABLE>
<CAPTION>
<S> <C> <C>
Gross proceeds $320,000
Reduction in proceeds for post closing adjustments (5,553)
Estimated transaction costs (3,000)
----------
Net proceeds 311,447
McGaw's net book value at March 31, 1997 296,574
Adjusted for items excluded per the Agreement (21,273)
----------
McGaw's adjusted net book value 275,301
General reserves associated with transaction
related items 2,000
----------
Gain 34,146
Estimated taxes (30,799)
----------
Net gain $ 3,347
==========
</TABLE>
<PAGE>
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 thereunto duly authorized.
IVAX CORPORATION
/s/ MICHAEL W. FIPPS
--------------------------------
Michael W. Fipps
Senior Vice President -- Finance
and Chief Financial Officer
Date: July 8, 1997
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
2.1 Stock Purchase Agreement, dated May 30, 1997, between IVAX
Corporation and B. Braun of America Inc. (incorporated by
reference to IVAX Corporation's Current Report on Form 8-K
dated May 30, 1997).
2.2 Assignment and Assumption Agreement and Amendment No. 1 to
Stock Purchase Agreement, dated as of June 17, 1997, by and
among IVAX Corporation, B. Braun of America Inc. and B. Braun
Medical Inc.
99.1 Press Release of IVAX Corporation relating to the sale of
McGaw.
EXHIBIT 2.2
ASSIGNMENT AND ASSUMPTION AGREEMENT
AND
AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT AND AMENDMENT NO. 1 TO STOCK
PURCHASE AGREEMENT (this "Assignment and Amendment") is made and executed as of
the 17th day of June, 1997 by and among B. BRAUN OF AMERICA INC., a Pennsylvania
corporation ("BOA"), B. BRAUN MEDICAL INC., a Pennsylvania corporation ("BBM"),
and IVAX CORPORATION, a Florida corporation ("Seller").
RECITALS
A. BOA is a party to that certain Stock Purchase Agreement (the
"Purchase Agreement") by and between Seller and BOA, as Purchaser.
B. BOA and Seller wish to amend certain provisions of the Purchase
Agreement as provided herein.
C. As permitted by Section 15.5 of the Purchase Agreement, BOA wishes
to transfer and assign to BBM the Agreement and all of BOA's rights, interests
and obligations thereunder, and BBM wishes to accept such assignment and to
assume from BOA all of BOA's obligations under the Purchase Agreement, all on
the terms and conditions set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the premises and covenants
contained herein, the parties hereto hereby agree as follows:
1. DEFINITIONS. All terms not otherwise defined herein shall have the
meanings given them in the Purchase Agreement.
2. AMENDMENTS TO AGREEMENT.
(a) BOA and Seller hereby amend Section 1.98 of the Purchase Agreement to
read in its entirety as follows:
"1.98 'PURCHASER' shall have the meaning set forth in the introductory
paragraph of this Agreement."
(b) BOA and Seller hereby amend Section 11.2(b) of the Purchase Agreement
to read in its entirety as follows:
"(b) PURCHASER agrees and, to the extent the Closing occurs, shall
cause BBM and each McGaw Company to jointly and severally agree, to
indemnify and hold SELLER harmless from any Indemnified Liabilities
which result from or arise out of the breach of any representation,
<PAGE>
warranty, covenant or agreement made by PURCHASER in this Agreement, in
any Schedule or Exhibit to this Agreement, in any Ancillary Agreement
or in any certificate furnished or to be furnished by or on behalf of
PURCHASER under this Agreement."
(c) BOA and Seller hereby amend Section 15.2 of the Purchase Agreement to
read in its entirety as follows:
"15.2 PERFORMANCE OF LEASE OBLIGATIONS. PURCHASER agrees that, if SELLER
does not obtain the termination of SELLER's guarantee of certain
obligations of McGaw pursuant to the lease by McGaw of McGaw's facility
in Carrollton, Texas, then PURCHASER shall, from and after the Closing,
cause McGaw to faithfully and timely perform all obligations of McGaw
pursuant to such lease including, without limitation, the payment of
rent and the performance or observance of all covenants of McGaw
thereunder. PURCHASER further agrees to hold harmless and indemnify
SELLER and its shareholders, directors, officers, employees,
representatives, agents, successors and assigns from and against any
Indemnified Liabilities which result from or arise out of any breach by
McGaw of its obligations under such lease in accordance with the
provisions of Article 11 hereof."
(d) BOA and Seller hereby amend Section 11.14(a) of the Purchase Agreement
to read in its entirety as follows:
"(a) With respect to the indemnity obligation set forth in Section 11.2
herein, SELLER and PURCHASER shall not be required to indemnify and
hold harmless the other until the aggregate amount of the Indemnified
Liabilities owed to the Indemnified Party hereunder exceeds Seven
Million Five Hundred Thousand Dollars ($7,500,000) (the "Basket
Amount"); provided, however, that at such time as such Indemnified
Liabilities exceed the Basket Amount, the Indemnifying Party shall pay
to the Indemnified Party Three Million Seven Hundred Fifty Thousand
Dollars ($3,750,000) plus any and all other Indemnified Liabilities
resulting from the indemnity obligation pursuant to Section 11.2 in
excess of such Seven Million Five Hundred Thousand Dollars ($7,500,000)
amount. Nothwithstanding the foregoing, none of the limitations in this
Section 11.14(a) shall be applicable to any breach of any covenant or
agreement of a party hereto contained herein, or to any breach of any
of SELLER'S representations or warranties set forth in Section 4.5
hereof other than those contained in the first sentence of Section 4.5
or with respect to the BioMed Shares."
1. ASSIGNMENT BY BOA TO BBM. BOA hereby assigns to BBM all of BOA's
rights and interests under the Agreement.
2. ASSUMPTION BY BBM. BBM hereby accepts BOA's assignment to BBM
hereunder of all of BOA's rights and interests under the Agreement and
BBM hereby unconditionally and expressly assumes all of BOA's duties
and obligations under the Purchase Agreement in BOA's place and stead
and shall faithfully perform the same.
-2-
<PAGE>
3. ACKNOWLEDGMENT OF BOA. BOA hereby acknowledges that the assignment
by BOA to BBM of its rights and interests and the assumption of BOA's
duties and obligations pursuant to this Assignment and Amendment shall
not operate in any way to modify, relieve or discharge any of the
obligations of BOA under the Purchase Agreement. BOA and BBM remain
jointly and severally liable for all obligations and liabilities of
PURCHASER under the Purchase Agreement.
4. CONSENT OF SELLER. Seller hereby expressly consents to the assignment
and assumption provided for in Sections 3 and 4 hereof.
IN WITNESS WHEREOF, the parties have executed this Assignment and
Amendment as of the date first above written.
BOA: B. Braun of America Inc. BBM: B. Braun Medical Inc.
/S/ CAROLL H. NEUBAUER /S/ CAROLL H. NEUBAUER
- -------------------------------- --------------------------------
by Caroll H. Neubauer, Chairman by Caroll H. Neubauer, Chairman
and Chief Executive Officer and Chief Executive Officer
ACKNOWLEDGED AND AGREED
SELLER: IVAX CORPORATION
/S/ JAMES M. MILLSAP
-------------------------------------------
by James M. Millsap, Senior Vice President,
Corporate Development
-3-
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
B. BRAUN MELSUNGEN AG COMPLETES ACQUISITION
OF MCGAW, INC. FROM IVAX CORPORATION
Miami, Florida -- June 25, 1997 -- IVAX Corporation (AMEX:IVX) today
announced that B. Braun Melsungen AG completed the acquisition of McGaw, Inc.
from IVAX. This announcement follows a May 30, 1997 news release announcing that
B. Braun had agreed to acquire McGaw from IVAX. McGaw develops, manufactures and
markets intravenous (IV) solutions and related products.
B. Braun paid IVAX $320 million in cash at closing, subject to certain
post closing adjustments. Over a period of years, B. Braun will make additional
payments, up to a total of $80 million, contingent upon the combined operating
results of McGaw and B. Braun's principal U.S. operating subsidiary. IVAX will
also receive royalties and other payments based on McGaw's and B. Braun's
commercialization of the Duplex(TM) drug delivery system. The Duplex(TM) system,
presently under development, is a multi-compartment IV drug delivery system
designed for IV drugs that have limited stability after mixing.
IVAX used a portion of the cash received at closing to pay off its
existing credit facility (which is being terminated) and concurrently recognized
an approximate $2.1 million pre-tax charge relating to the early extinguishment
of this debt.
IVAX Corporation, headquartered in Miami Florida, is a holding company
with core subsidiaries engaged in the research, development, manufacture and
marketing of generic and branded pharmaceuticals.
EXCEPT FOR THE HISTORICAL MATTERS CONTAINED HEREIN, STATEMENTS IN THIS
PRESS RELEASE ARE FORWARD LOOKING AND ARE MADE PURSUANT TO THE SAFE HARBOR
PROVISIONS OF THE SECURITIES LITIGATION REFORM ACT OF 1995. INVESTORS ARE
CAUTIONED THAT FORWARD LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES WHICH
MAY AFFECT THE COMPANY'S BUSINESS AND PROSPECTS, INCLUDING THE RISK THAT IVAX
MAY NOT RECEIVE FUTURE PAYMENTS RELATING TO THE MCGAW SALE, AND CERTAIN
ECONOMIC, COMPETITIVE, GOVERNMENTAL, TECHNOLOGICAL AND OTHER FACTORS DISCUSSED
IN IVAX' FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONTACT:
Joseph C. Jones
IVAX Vice President -
Corporate Communications
305-575-6042
