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ABIOMED, Inc.
Filing Type: Form 425 OTHERDOC
Description: Form 425
Filing Date: January 12, 2001
Period End: N/A
Primary Exchange: NASDAQ
Ticker: ABMD
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ABIOMED OFFERS ANSWERS TO QUESTIONS ABOUT PROPOSED ACQUISITION OF
THERMO CARDIOSYSTEMS
DANVERS, MA, January 12, 2001--ABIOMED, Inc. (NASDAQ: ABMD), a leader
in heart assist and replacement technology, provided today answers to questions
regarding its offer to acquire Thermo Cardiosystems, Inc. (AMEX: TCA).
On January 9, 2001, ABIOMED confirmed that it has made a series of
offers to acquire TCA. On January 11, 2001, ABIOMED announced that it had
revised its offer. ABIOMED's January 11th offer is to purchase all of the shares
of stock of TCA in exchange for a fixed $11.50 per share of TCA common stock,
with a minimum of $2.50 in cash and the balance in ABIOMED common stock. There
are approximately 38.6 million shares of TCA stock currently outstanding. The
number of shares to which TCA shareholders would be entitled to would be
calculated based on the average trading price of ABIOMED's stock in a defined
time period prior to closing. The new combined entity would be called ABIOMED,
Inc. and would be managed by a team led by Dr. David M. Lederman. Because there
is no overlap in product lines, the desire would be to retain management,
employees and operations of both companies.
Following are questions about the proposed acquisition. The
corresponding answers represent the opinions of ABIOMED's senior management.
Q. Why is the acquisition of TCA beneficial to ABIOMED?
A. There are four primary markets for mechanical circulatory support
devices: bridge to recovery, bridge to transplant, alternative to
transplant, and heart replacement. ABIOMED is the leader in the first
and last while TCA is an important force in the other two. Together, we
believe we would have the best products for all four markets. We are
already excited about the two markets in which we currently
participate. Becoming leaders in the other two markets as well would
add to our strength. TCA is a strong and profitable company with good
people, sound technology and an interesting developmental pipeline. We
think
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that it is more valuable in our hands than in anyone else's because we
believe that a number of ABIOMED's proprietary technologies would
improve TCA's products. Our product lines are complementary, with no
overlaps, as are our development projects. We sell our products to the
same customers and have operated with great respect for one another.
The combination of ABIOMED and TCA would bring together the two
strongest field clinical, technical and sales teams in our industry,
and would offer an unparalleled level of customer service on behalf of
heart failure patients. We believe that ABIOMED's prospects without
this acquisition remain excellent but our prospects would be even
better together. While TCA would make a nice addition to ABIOMED, we do
not compete with them, and if our proposed transaction with TCA does
not proceed, there will be no negative effect on ABIOMED's prospects in
existing markets.
Q. Why submit a bid to purchase TCA now, rather than earlier?
A. There are three primary reasons why we have elected to more actively
pursue TCA now. First, the opportunity only recently presented itself
within a fair price range where we could make a superior offer for TCA
without unacceptable dilution for our existing shareholders. Second,
through the second half of 2000, ABIOMED focused a great deal of energy
and resources on the key milestone of preparing and filing our IDE
submission to begin clinical testing of the AbioCor(TM) Implantable
Replacement Heart. The replacement heart opportunity is the largest of
the four circulatory support markets and we will not compromise our
ability to succeed there. With the IDE submission behind us, we are
prepared to give more attention to other strategic initiatives.
Finally, we have been listening to our customers, who include TCA's
largest customers and who have been telling us that they would be
excited about the combination of our two companies.
Q. Is this a friendly offer?
A. Absolutely. Our offer is before the TCA Board. We expect and trust that
they will review it carefully and make a decision consistent with their
fiduciary
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responsibility. They have both the responsibility and the choice to
make the proper decision. We made our offer confidentially, and spoke
in public only after our offer was disclosed by participants in the now
pending transaction. If we are successful, we are confident that we can
build on a positive relationship with TCA, and work together with them
to ensure success as a joint working team on a going forward basis. If
they elect to stay with their existing merger we will continue to work
to grow ABIOMED in our present markets and will selectively pursue
other synergistic opportunities.
Q. Have there been negotiations between ABIOMED and TCA?
A. No. We have informed them that we are prepared to answer any questions
that they may have. We have also offered to meet with them to review
the advantages of combining ABIOMED and TCA. We understand that they
may have certain contractual restrictions that have prevented them from
contacting us.
Q. ABIOMED's offer contains a cap on the amount of stock you are willing
to transfer. Might this decrease the value of ABIOMED's bid?
A. If TCA accepts our offer we do not expect the cap to come into play.
Our offer is very straightforward. We have essentially mirrored the
terms and conditions of TCA's merger agreement with Thoratec such that
the only material difference is price. We have offered a fixed price,
while the price that Thoratec has offered has been volatile. We believe
that we have presented a superior offer to the Thoratec offer that does
not have price uncertainty. Throughout the period of our proposals to
TCA, we calculate that ABIOMED's offers have been approximately $3 per
share higher than the offer from Thoratec. To offer a fixed price, we
needed to do two things to succeed. First, we needed to be confident in
ourselves because the calculation of shares to be distributed is based
on the future value of ABIOMED's stock. Second, we needed to ensure
that our offer would be considered superior under the merger agreement
between TCA and Thoratec.
Q. Why did you increase the cash component in the January 11th offer?
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A. We believe that TCA's Board would prefer a larger cash component which
is consistent with our desire to minimize the number of shares that we
issue.
Q. Is your offer dependent upon securing financing?
A. Our current offer, which includes a minimum of $2.50 per share in cash,
would be funded from the cash on hand of the two companies. Given that
we would prefer to issue as few shares as possible. We are prepared to
review potential ways to increase the cash portion of our offer further
if TCA responds to us that this would be desirable to them, provided
that we continue to retain sufficient funds to support operations.
Q. If TCA were to accept your offer, how long would it take to close the
transaction?
A. We are prepared to move very quickly. Because our products do not
compete, we would not anticipate regulatory delays. Furthermore, our
close geographic proximity, good understanding of their business and
respect for their people will help facilitate a swift and effective
integration process. And, because the culture, missions and customers
of both companies are very similar, we believe that we are well
positioned to succeed.
The above questions and answers contain forward looking statements that involve
a number of risks and uncertainties that could cause actual results to differ
materially from those indicated by such forward looking statements, including
integration of acquisitions, ability to sustain and manage growth, changing
market conditions, and other risks detailed in the Company's filings with
Securities and Exchange Commission.
This material is not a substitute for the proxy statement/prospectus included in
the registration statement which would be filed with the Securities and Exchange
Commission by ABIOMED in connection with this proposed business combination with
Thermo Cardiosystems. Investors are urged to read any such proxy
statement/prospectus because it will contain important information, including
detailed risk factors. The registration statement that would be filed by
ABIOMED, as well as the proxy
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statement/prospectus and other documents filed with the SEC by ABIOMED, will be
available free of charge at the SEC's website (www.sec.gov) and from ABIOMED.
ABIOMED, its directors and certain of its executive officers may be considered
participants in any solicitation of proxies made in connection with the proposed
business combination. Information concerning ABIOMED's directors and executive
officers can be found in the documents filed or to be filed with the SEC,
including any such proxy statement/prospectus.
