LONDON, UK: Smiths Group has now entered into a binding share purchase agreement with ICU Medical Inc. in relation to the sale of Smiths Medical to ICU Medical.
The ICU Transaction is unanimously recommended by the board of directors of Smiths to be in the best interests of shareholders.
On 8 September 2021, the Company announced that it had agreed the sale of Smiths Medical to ICU Medical.
The Company announced that the Company had entered into a put option agreement with ICU Medical. Pursuant to the Put Option, following the completion of an information and consultation process with the Social and Economic Committee of Smiths Medical France SAS, Smiths has the unilateral and unconditional right to require ICU Medical to enter into a binding share purchase agreement on the terms reflected in the ICU Transaction.
The French Employment Consultation has now been completed. Accordingly, the Company announces that it has exercised the Put Option and has now entered into a binding share purchase agreement with ICU Medical for the sale of Smiths Medical.
The Board has unanimously recommended the ICU Transaction as being in the best interests of shareholders. The ICU Transaction is superior to all other proposals received during the separation and sale process.
Smiths Medical is a leading global medical device business specialising in infusion systems, vascular access, and vital care. The Board determined that the separation of Smiths Medical would enable Smiths to concentrate on growing as a leading industrial technology group and enable Smiths Medical to focus on realising its full potential in the dynamic medical device market. Since the announcement of the proposed separation, Smiths Medical has been accounted for as a discontinued operation.
The ICU Transaction will create an expanded global medical device company, bringing a combined portfolio of products and solutions to more patients and providers worldwide. The combination represents a meaningful value creation opportunity through both revenue and cost synergies.
The ICU Transaction values Smiths Medical at a headline enterprise value of $2.7 billion (equivalent to £2.0 billion), on a cash and debt free basis, plus an additional $0.1 billion contingent on the future share price performance of the enlarged ICU Medical business. After deduction of debt and other liabilities, the equity value of the ICU Transaction is $2.4 billion.
The initial net cash proceeds on completion of the ICU Transaction are $1.85 billion (equivalent to £1.34 billion). In addition to the initial net cash proceeds, the ICU Transaction carries future material upside as Smiths will also receive 2.5 million new ICU Medical shares, worth $0.5 billion at ICU Medical’s closing share price on 7 September 2021 of $205.98, equivalent to approximately 10% of the fully diluted enlarged ICU Medical share capital. Smiths’ current intention is to retain these shares.
Smiths shall also be entitled to an additional $0.1 billion of consideration contingent on Smiths retaining beneficial ownership of at least 1.25 million ICU Medical shares and the ICU Medical share price averaging $300 or more for any 30-day period during the first three years post-completion, or for any 45-day period in the fourth year post completion.
ICU Medical will also pay Smiths $250,000 of cash per day to compensate Smiths for the cash which is expected to be generated by Smiths Medical from 1 January 2022 until the ICU Transaction closes.
The ICU Transaction is a Class 1 transaction for Smiths under the UK Listing Rules and is therefore conditional upon the approval of Smiths’ shareholders. It is also conditional on receipt of certain merger and other regulatory approvals and the termination of the sale agreement with Trulli Bidco Limited.
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27 Sep, 4:36 pm GMT+1 ·Disclaimer
