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Filer: InnerDyne, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: InnerDyne, Inc.
Commission File No. 0-19707
October 4, 2000
COMMUNICATION TO INNERDYNE EMPLOYEES
MERGER AGREEMENT AND PROPOSAL
-Announcement on October 4, 2000 of the signing of a definitive agreement
defining the terms and conditions of the acquisition of InnerDyne by Tyco
International.
-As indicated, proposal has been approved by the Board of Directors, who also
have received an opinion from US Bancorp Piper Jaffray confirming that the
offer is fair to InnerDyne shareholders, from a financial point of view.
-Offer is a stock tender, valued at $7.50 per InnerDyne common share, payable in
TYC common shares.
-The merger is contingent upon requisite governmental approvals.
-If the process proceeds as expected, the tender offer should close sometime
during the 4th quarter of 2000.
-The agreement does call for the accelerated vesting of InnerDyne stock options
just prior to the close; each optionee will receive the value of each
respective option in cash.
IMPACT ON OPERATIONS
-From today until the completion of the merger, assuming it receives all
required approvals, it is "business as usual". That means we will continue to
compete vigorously in the market. Our goal is to maintain InnerDyne's business
in its current healthy state.
-During this period, subject to constraints under the anti-trust laws and
especially after the close of the merger, we will be discussing with the U. S.
Surgical unit of Tyco International longer range plans for integration of our
business into U. S. Surgical's operations.
-We are anticipating minimal changes over the next few months.
-The merger of our business with a larger entity offers the opportunity to more
rapidly expand our radial dilation technology to patients around the world.
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-It is likely to also provide opportunities for a number of our employees to
join one of the world's leading providers of medical devices and products.
-There will be an opportunity to meet some of the Tyco/U. S. Surgical management
team over the coming weeks.
BACKGROUND ON TYCO INTERNATIONAL
-Tyco International characteristics
-Revenues approximately $30 billion
-Major product lines: Telecommunications and Electronics
Healthcare and Specialty Products
Fire and Security Services
Flow Control Products and Services
-Approximately 2/3 of business is in U. S.
-Growth has been fueled by acquisition and internal growth
-Strong focus on earnings (InnerDyne fits this profile well)
-Healthcare businesses will exceed $7 billion in sales in 2000, when the
pending acquisition of Mallinckrodt is completed
-Bermuda corporation, with U. S. headquarters in New Hampshire
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October 4, 2000
WHY DOES INNERDYNE/TYCO MERGER MAKE SENSE?
1. Positive stock market perception of smaller medical device stocks at the
present time
2. Demonstrated consistency in the Company's financial performance has
positively impacted valuation
3. A number of recent developments have positively impacted valuation,
including vascular access agreement with Maxxim and award of Breakthrough
Technology designation and contract with Premier Purchasing Partners
4. The Board of Directors believes that the offer fairly represents an
appropriate valuation, given the Company's business outlook and prospects
