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):
May 2, 1997
________________________________________
THERMO CARDIOSYSTEMS INC.
(Exact name of Registrant as specified in its charter)
Massachusetts 1-10114 04-3027040
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation or
organization)
470 Wildwood Street
P. O. Box 2697
Woburn, Massachusetts 01888-2697
(Address of principal executive offices) (Zip Code)
(617) 622-1000
(Registrant's telephone number
including area code)
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Item 2. Acquisition or Disposition of Assets
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On May 2, 1997, Thermo Cardiosystems Inc. (the "Company") acquired
International Technidyne Corporation ("ITC"), a wholly owned subsidiary of
Thermo Electron Corporation ("Thermo Electron"), in exchange for the right
to receive 3,355,705 shares of the Company's common stock. ITC is a
manufacturer of near-patient, whole-blood coagulation-testing equipment and
related disposables, as well as single-use, premium-priced, skin-incision
devices. In 1996, ITC had revenues of $34,000,000, with net income of
$4,700,000.
The acquisition was made pursuant to an Agreement and Plan of
Reorganization dated as of May 2, 1997 (the "Agreement"), among the
Company, ITC Acquisition Inc., a wholly owned subsidiary of the Company
("Acquisition"), Thermo Electron, ITC Holdings Inc., a wholly owned
subsidiary of Thermo Electron that owned ITC ("Holdings"), and ITC. Under
the terms of the Merger Agreement, (i) Acquisition merged with and into
ITC, (ii) outstanding shares of ITC's common stock were canceled and
converted into the right to receive 3,355,705 shares of the Company's
common stock, (iii) each outstanding share of Acquisition's common stock
was canceled and converted into one share of the common stock of ITC, and
(iv) ITC became a wholly owned subsidiary of the Company.
The shares of the Company's common stock to be issued in connection
with the acquisition will be so issued as soon as such shares are listed
for trading upon the American Stock Exchange, Inc. The exchange requires
that the listing be approved by the holders of a majority of the Company's
outstanding shares present and voting at a shareholders' meeting. The
meeting is expected to be held before the end of fiscal 1997. Thermo
Electron and Thermedics Inc. ("Thermedics") have each agreed to vote all of
the shares of the Company's common stock held by them as of the record date
of the meeting in favor of the listing of the Company's shares and all
matters related thereto. Before giving effect to the issuance of the
shares to be issued pursuant to the Agreement, Thermo Electron and
Thermedics owned an aggregate of 54.2% of the outstanding common stock of
the Company. Giving effect to the issuance of such shares, Thermo Electron
and Thermedics own an aggregate of 58.1% of such outstanding common stock.
The consideration to be paid for ITC was based on the Company's
determination of the fair market value of ITC's business. Based on the
average of the closing prices of the Company's common stock as reported on
the American Stock Exchange for the five trading days ending on March 27,
1997, the shares to be issued to Thermo Electron had a value of $75,000,000
prior to the execution of the Agreement. Prior to the execution of the
Agreement, Cazenove Incorporated, an investment banking firm, provided a
written opinion to the Board of Directors of the Company indicating that,
as of May 2, 1997, the consideration to be paid for ITC was fair to the
Company from a financial point of view.
The Company has no present intention to use ITC's assets for purposes
materially different from the purposes for which such assets were used
prior to the acquisition. However, the Company will review ITC's business
and assets, corporate structure, capitalization, operations, properties,
policies, management and personnel and, upon completion of this review, may
develop alternative plans or proposals, including mergers, transfers of a
material amount of assets or other transactions or changes relating to such
business.
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Item 7. Financial Statements, Pro Forma Combined Condensed Financial
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Information and Exhibits
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(a) Financial Statements of Business Acquired: Information
meeting the requirements of this Item 7(a) will be filed by
amendment within the time period permitted by Item 7(a)(4) of
Form 8-K.
(b) Pro Forma Combined Condensed Financial Information:
Information meeting the requirements of this Item 7(b) will
be filed by amendment within the time period permitted by
Item 7(a)(4) of Form 8-K.
(c) Exhibits
2. Agreement and Plan of Reorganization dated as of May 2,
1997, by and among Thermo Cardiosystems Inc., ITC
Acquisition Inc., Thermo Electron Corporation, ITC
Holdings Inc. and International Technidyne Corporation
(incorporated by reference from Exhibit 2.1 to the
Company's Quarterly Report on Form 10-Q for the Quarter
ended March 29, 1997).
99. Opinion of Cazenove Incorporated dated May 2, 1997.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
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On May 9, 1997, the Company issued a press release to announce that it
had entered into an agreement to sell at par $70 million principal amount
of 4-3/4% convertible subordinated debentures due 2004 (the "Debentures").
Of that amount, Debentures having an aggregate principal amount of
$14,475,000 were sold on May 14, 1997 without registration under the
Securities Act of 1933 (the "Securities Act") in reliance on the exemption
from registration provided by Regulation S under the Securities Act (the
"Reg. S Debentures"). The Reg. S Debentures were offered, sold and
delivered only to non-United States persons outside of the United States,
its territories and possessions. (The balance of the Debentures were sold
in the United States and/or to United States persons in reliance on the
exemption from registration provided by Rule 144A under the Securities
Act.)
The managers of the Debenture offering were Lehman Brothers
International (Europe), Salomon Brothers Inc. and Cowen & Company. The
total underwriting discounts and commissions applicable to the Reg. S
Debentures equaled $361,875, or 2.5% of the principal amount thereof.
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The Debentures will be convertible into shares of the Company's common
stock at a price of $31.415 per share on or after the later of (i) the
expiration of the 40-day period that began on May 14, 1997 and (ii) the
effective date of a registration statement to be filed by the Company
registering the resale of such shares of Common Stock under the Securities
Act.
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, on this 15th day of May, 1997.
THERMO CARDIOSYSTEMS INC.
By: /s/ Jonathan W. Painter
-----------------------
Jonathan W. Painter
Treasurer
[CAZENOVE LOGO]
CAZENOVE
INCORPORATED
1177 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10036
TELEPHONE: (212) 376-1225 FACSIMILE: (212) 376-5387
MEMBER: PACIFIC STOCK EXCHANGE
Board of Directors
Thermo Cardiosystems Inc.
470 Wildwood Street
P.O. Box 2697
Woburn, MA 01888-2697
May 2, 1997
Dear Sirs,
We understand that Thermo Cardiosystems Inc. (the "Company")
proposes to engage in a transaction (the "Transaction") with
Thermo Electron Corporation ("Thermo"), an affiliate of the
Company, pursuant to which the Company will acquire the
outstanding capital stock of International Technidyne Corporation
("ITC"), a wholly-owned subsidiary of Thermo, in consideration of
the payment of 3,355,705 shares of common stock, $0.10 par value,
of the Company valued on March 29, 1997 at $75,000,000, subject
to adjustment as described in the Agreement and Plan of
Reorganization (the "Acquisition Agreement").
The terms of the proposed Transaction are to be set forth in
the Acquisition Agreement between the Company and Thermo. We
have been provided with and have reviewed a proposed form of the
Acquisition Agreement dated April 29, 1997. We have assumed for
the purposes of this opinion that the Acquisition Agreement in
the form executed by the parties will not differ from such
proposed form in any material respect.
You have asked us to advise you with respect to whether or
not the consideration to be paid by the Company for the
outstanding capital stock of ITC in connection with the proposed
Transaction is fair, from a financial point of view, to the
Company. With respect to such opinion, we have, among other
things:
(i) reviewed the proposed form of the Acquisition
Agreement;
(ii) reviewed certain historical and prospective financial,
operating and other information furnished to us by ITC
and Thermo concerning ITC;
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(iii) met with the senior management of ITC to discuss the
business and operations of ITC, as well as the
prospects for the industry;
(iv) visited the principal operations and facilities of ITC;
(v) reviewed publicly available financial and market data
for public companies which we deemed comparable to ITC;
(vi) reviewed the financial terms of recent business
combinations deemed comparable by us for which
information was publicly available; and
(vii) conducted such other financial studies, analyses and
investigations as we deemed appropriate for purposes of
this opinion.
We have, in the past, provided financing and financial
advisory services to Thermo and have received fees for rendering
such services.
In rendering our opinion we have relied upon and assumed the
accuracy, genuineness, completeness and fairness of the financial
and other information provided by the Company or otherwise made
available to us and have not attempted independently to verify
such information. We have relied upon the assurances of the
managements of the Company and Thermo that they are not aware of
any information or facts that would make the information provided
to us misleading. We have not made an independent evaluation or
appraisal of any particular asset, nor have we been furnished
with such appraisals, and express no opinion regarding ITC's
liquidation value. Our opinion is necessarily based upon market,
economic and other conditions as they exist on, and can be
evaluated as of, the date of this letter.
It is understood that our opinion has been prepared solely
for the confidential use of the Board of Directors of the
Company. This letter, except as otherwise required by law, is
not to be reproduced, summarized, described, quoted, referred to,
or given to any other person, except Thermo, or made available,
in whole or in part, in any registration statement, prospectus,
proxy statement, or in any other written document used in
connection with the proposed Transaction, nor shall this letter
be used for any other purpose without our prior written consent.
Based upon and subject to the foregoing, we are of the
opinion that, as of the date hereof, the consideration to be paid
by the Company for ITC in connection with the proposed
Transaction is fair, from a financial point of view, to the
Company.
Yours faithfully,
CAZENOVE INCORPORATED
