STERIS Corporation Expands Presence in GI Market with Purchase of US Endoscopy
Mentor, Ohio - July 17, 2012 - STERIS Corporation (NYSE:STE) announced today the signing of an agreement to acquire privately-owned United States Endoscopy Group, Inc. (US Endoscopy). Founded in 1991 and based in Mentor, Ohio, US Endoscopy is a leader in the design, manufacture and sale of therapeutic and diagnostic medical devices and support accessories used in the gastrointestinal endoscopy and urology markets worldwide. With the acquisition of US Endoscopy, STERIS will be gaining direct access to the procedural spaces in the GI market with a broad franchise of single-use consumable medical devices.
“The addition of US Endoscopy to our current portfolio is a natural extension of our presence in the GI market,” said Walt Rosebrough, President and CEO of STERIS Corporation. “They have generated double-digit organic growth for many years through successful new product development, and the acquisition provides STERIS immediate scale with a direct sales force in the U.S. and a strong brand name. This acquisition is aligned with our strategy to expand in areas with attractive market dynamics that are adjacent to our current businesses. We are impressed with the strength of their management team and look forward to working with them to capture the opportunities ahead of us.”
“We are absolutely delighted to have the opportunity to become part of STERIS, a company we respect and know well,” said Gulam Khan, President, Chief Executive Officer and Co-Chairman of US Endoscopy. “Not only will we gain the size and scale necessary to continue to innovate and grow over the long term, we will also ensure that we can and will remain a vital part of the Greater Cleveland Ohio community. While we have had great success the last two decades, having the support of STERIS will better enable us to take full advantage of global opportunities.”
STERIS has a strong presence in the procedural spaces within the hospital, in particular the operating room, but has not historically had a presence in the procedure spaces within the GI environment. With the acquisition of US Endoscopy, STERIS will expand its presence in the GI market. STERIS currently offers reprocessing equipment, including high level disinfectors and sterilizers, chemistries for manual and automated reprocessing, and consumables, including pre-cleaning sponges, channel and valve brushes and soak/transport containers. The acquisition of US Endoscopy will also add direct access to the global market, where US Endoscopy is a niche player focused on technology and innovation. While the market is growing in-line with STERIS’s historic rates, US Endoscopy has proven its ability to grow two to three times faster than the market due to the success of new products over the past five years.
Lazard acted as financial advisor and Jones Day acted as legal advisor to STERIS in connection with the acquisition. Baker & Hostetler LLP, McCarthy, Lebit, Crystal & Liffman Co., L.P.A., and Cohen & Company, Ltd. and Cohen Capital Advisors, Ltd. served as advisors for US Endoscopy.
The mission of STERIS Corporation is to provide a healthier today and safer tomorrow through knowledgeable people and innovative infection prevention, decontamination and health science technologies, products and services. The Company has approximately 5,000 dedicated employees around the world working together to supply a broad array of solutions by offering a combination of equipment, consumables and services to healthcare, pharmaceutical, industrial and government Customers. The Company is listed on the New York Stock Exchange under the symbol STE. For more information, please visit www.steris.com.
About US Endoscopy
Since 1991, US Endoscopy has been a world leader in endoscopy device design and manufacturing, serving the U.S. and international gastrointestinal endoscopy markets. By listening and delivering solutions in the field of endoscopy, our unique lines of proprietary devices provide better, more enhanced product options for GI clinicians. A significant and growing portion of sales are proprietary endoscopic devices created by the company's new product development team with the guidance and direction of luminary physicians and nurses worldwide.
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This press release and the referenced conference call may contain statements concerning certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to the Company or its industry, products or activities that are intended to qualify for the protections afforded "forward-looking statements" under the Private Securities Litigation Reform Act of 1995 and other laws and regulations. Forward-looking statements speak only as to the date of this press release, and may be identified by the use of forward-looking terms such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "targets," "forecasts," "outlook," "impact," "potential," "confidence," "improve," "optimistic," "deliver," "comfortable," "trend", and "seeks," or the negative of such terms or other variations on such terms or comparable terminology. Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof. Other risk factors are described herein and in the Company's Form 10-K and other securities filings. Many of these important factors are outside STERIS's control. No assurances can be provided as to any result or the timing of any outcome regarding matters described in this press release, the referenced presentation or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, consent decree, rebate program, transition, cost reductions, business strategies, earnings or revenue trends or future financial results (including without limitation the settlement of the SYSTEM 1 class action litigation and the regulatory matters related to SYSTEM 1E or its accessories). References to products, the consent decree, the transition or rebate program, or the class action settlement, are summaries only and should not be considered the specific terms of the decree, settlement, program or product clearance or literature. Unless legally required, the Company does not undertake to update or revise any forward-looking statements even if events make clear that any projected results, express or implied, will not be realized. Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, (a) the potential for increased pressure on pricing or costs that leads to erosion of profit margins, (b) the possibility that market demand will not develop for new technologies, products or applications or the Company's rebate program, transition plan or other business initiatives will take longer, cost more or produce lower benefits than anticipated, (c) the possibility that application of or compliance with laws, court rulings, certifications, regulations, regulatory actions, including without limitation those relating to FDA warning letters, government investigations, the December 3, 2009 or February 22, 2010 FDA notices, the April 20, 2010 consent decree and related transition plan and rebate program, the SYSTEM 1E device, the outcome of any pending FDA requests, inspections or submissions, or other requirements or standards may delay, limit or prevent new product introductions, affect the production and marketing of existing products or services or otherwise affect Company performance, results, prospects or value, (d) the potential of international unrest, economic downturn or effects of fluctuations in currencies, tax assessments or anticipated rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs, (e) the possibility of reduced demand, or reductions in the rate of growth in demand, for the Company's products and services, (f) the possibility that anticipated growth, cost savings, rebate assumptions, new product acceptance, performance or approvals, including without limitation SYSTEM 1E and accessories thereto, or other results may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, or other issues or risks associated with our business, industry or initiatives including, without limitation, the consent decree, rebate program, and the transition from the SYSTEM 1 processing system or those matters described in our Form 10-K for the year ended March 31, 2012 and other securities filings, may adversely impact company performance, results, prospects or value, (g) the possibility that anticipated US Endoscopy tax benefits will not be realized or will be other than anticipated, (h) the possibility that the transaction will not close when anticipated or at all, that expected financial results of the transaction will not be achieved or that key US Endoscopy management members are unable to be retained; (i) the effect of the contraction in credit availability, as well as the ability of our Customers and suppliers to adequately access the credit markets when needed, and (j) those risks described in our securities filings including our Annual Report on Form 10-K for the year ended March 31, 2012, and other securities filings.
Stephen Norton, Director of Corporate Communications and Government Affairs, STERIS Corporation