Johnson & Johnson and CLOSURE Medical Corporation Announce Acquisition Agreement
March 04 2005 - 7:32AM
PR Newswire (US)
Johnson & Johnson and CLOSURE Medical Corporation Announce
Acquisition Agreement Acquisition to Strengthen Presence in Topical
Adhesives and Surgical Sealants NEW BRUNSWICK, N.J. and RALEIGH,
N.C., March 4 /PRNewswire-FirstCall/ -- Johnson & Johnson
(NYSE:JNJ) and CLOSURE Medical Corporation (NASDAQ:CLSR), a global
leader in biomaterial-based medical devices, today announced a
definitive agreement whereby CLOSURE Medical will be acquired in a
cash-for- stock exchange. CLOSURE Medical is expected to operate as
a stand-alone entity reporting through Ethicon, Inc., a Johnson
& Johnson company, with whom CLOSURE Medical has worked since
1996 on the development of topical adhesives. Under the terms of
the agreement, CLOSURE Medical shareholders will receive $27.00 for
each outstanding CLOSURE Medical share. The value of the
transaction as of the anticipated closing date is estimated to be
approximately $370 million based upon CLOSURE Medical's
approximately 15.6 million fully diluted shares outstanding, net of
estimated cash on hand at time of closing. Upon closing, Johnson
& Johnson is expected to incur an estimated one-time after-tax
charge of approximately $68 million or $.02 per share, reflecting
the write-off of in-process research and development (IPR&D)
charges. This transaction does not affect Johnson & Johnson
guidance (excluding IPR&D) as reviewed at the year-end analyst
meeting held on January 25, 2005. The board of directors of CLOSURE
Medical Corporation has approved the transaction, which is subject
to clearance under the Hart-Scott-Rodino Antitrust Improvements Act
and other customary closing conditions. The agreement will require
the approval of CLOSURE Medical's stockholders and is expected to
close during the second quarter of 2005. CLOSURE Medical designs,
develops and manufactures a number of medical adhesives and
delivery devices based on a proprietary medical-grade cyanoacrylate
technology for specific applications in wound care and wound
closure. This technology is found in the family of DERMABOND(R)
Topical Skin Adhesive (2-octyl cyanoacrylate) products, which are
marketed by Ethicon, Inc. under an exclusive distribution
agreement. It is also found in BAND-AID(R) Brand Liquid Bandage and
other products for consumer and veterinary use. CLOSURE Medical's
cyanoacrylate formulations offer several advantages, including
speed, ease-of-use and performance, versus other products. "This
acquisition demonstrates Ethicon's commitment to further expand the
successful DERMABOND business and advances our efforts in topical
adhesives and surgical sealants," said Dennis N. Longstreet,
Company Group Chairman for Ethicon, Inc. "The capabilities and
experience Ethicon expects to gain from this transaction can
significantly contribute to the company's sustained success in
these important segments." Ethicon and CLOSURE Medical have both
focused on further developing topical adhesives. CLOSURE Medical's
OMNEX(TM) Surgical Sealant recently received European CE Mark
approval for use as an adjunct to sutures to achieve hemostasis in
peripheral vascular surgery. Approval for a similar indication in
the U.S. is anticipated in 2006. "CLOSURE Medical and Ethicon have
enjoyed a partnership to provide better health care and fulfill the
unmet needs of patients and physicians around the world," said
Daniel A. Pelak, CLOSURE's President and Chief Executive Officer.
"We believe this acquisition will provide benefits to both our
employees and shareholders." About Johnson & Johnson: Johnson
& Johnson, with approximately 109,900 employees, is the world's
most comprehensive and broadly based manufacturer of health care
products, as well as a provider of related services, for the
consumer, pharmaceutical, and medical devices and diagnostics
markets. Johnson & Johnson has more than 200 operating
companies in 57 countries, selling products throughout the world.
For more information, visit http://www.jnj.com/ . About Ethicon,
Inc.: Ethicon, Inc. develops and markets products for surgery,
wound management and advanced wound care treatment. Products are
marketed through four divisions: ETHICON Products for precise wound
closure and tissue repair; CARDIOVATIONS for minimally invasive
cardiac procedures; GYNECARE for minimally invasive women's health
procedures, and Johnson & Johnson Wound Management for
hemostasis and advanced wound care. About CLOSURE Medical
Corporation: CLOSURE Medical Corporation is a global leader in the
development and manufacture of innovative biomaterial-based medical
devices that fulfill the needs of healthcare practitioners,
patients and consumers. This press release contains
"forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. These statements are based on
current expectations, forecasts and assumptions that are subject to
risks and uncertainties, which could cause actual outcomes and
results to differ materially from these statements. Risks and
uncertainties include the satisfaction of the conditions to
closing, including receipt of shareholder and regulatory approval;
general industry and market conditions; general domestic and
international economic conditions, such as interest rate and
currency exchange rate fluctuations; technological advances and
patents attained by competitors; challenges inherent in new product
development, including obtaining regulatory approvals; domestic and
foreign health care reforms and governmental laws and regulations
affecting domestic and foreign operations; and trends toward health
care cost containment. A further list and description of these
risks, uncertainties and other factors can be found in Exhibit
99(b) of Johnson & Johnson's Annual Report on Form 10-K for the
fiscal year ended December 28, 2003 and CLOSURE Medical's Annual
Report on Form 10-K for the year ended December 31, 2003. Copies of
said Annual Reports on Form 10-K are available online at
http://www.sec.gov/ or on request from the applicable company.
Neither company assumes any obligation to update any
forward-looking statements as a result of new information or future
events or developments.) Additional Information and Where to Find
It: This material is not a substitute for the proxy statement
CLOSURE Medical will file with the Securities and Exchange
Commission. Investors are urged to read the proxy statement,
including detailed risk factors, when it becomes available, because
it will contain important information. The proxy statement and
other documents, which will be filed by CLOSURE Medical with the
Securities and Exchange Commission, will be available free of
charge at the SEC's website, http://www.sec.gov/, or by visiting
CLOSURE Medical's website at http://www.closuremed.com/ or the
"Clients" section of the Allen & Caron website at
http://www.allencaron.com/ . CLOSURE Medical and certain of its
directors, executive officers and certain other members of its
management may be deemed to be soliciting proxies from CLOSURE
Medical's shareholders in connection with the proposed transaction.
Investors may obtain a detailed list of names, affiliations and
interests of CLOSURE Medical participants in the solicitation of
proxies of CLOSURE Medical's shareholders by reading the proxy
statement when it becomes available. DATASOURCE: Johnson &
Johnson CONTACT: Johnson & Johnson, Media - Marc Monseau,
+1-732-524-1130, or Investors - Helen E. Short, +1-732-524-6491,
Stan Panasewicz, +1-732-524-2524, for Johnson & Johnson, or
CLOSURE Medical, Investors - Benny Ward, +1-919-876-7800; Allen
& Caron Inc., Media - Len Hall, +1-949-474-4300, for CLOSURE
Medical Web site: http://www.jnj.com/ http://www.closuremed.com/
Company News On-Call: http://www.prnewswire.com/comp/467347.html
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