Sybron Dental Specialties, Inc. to Acquire Dental Implant Company Innova LifeSciences Corporation
August 23 2004 - 9:30PM
PR Newswire (US)
Sybron Dental Specialties, Inc. to Acquire Dental Implant Company
Innova LifeSciences Corporation ORANGE, Calif., and TORONTO, Aug.
23 /PRNewswire-FirstCall/ -- The Boards of Sybron Dental
Specialties, Inc. (NYSE:SYD), and Innova LifeSciences Corporation
(TSX: IVO) announced today that they have reached an agreement
whereby Sybron will make an all-cash offer to purchase all of the
issued and outstanding common shares of Innova at a price of CDN
$1.4106 per share for an aggregate consideration of approximately
CDN $57.1 million (approximately US $43.7 million). The acquisition
will be financed with a combination of Sybron's existing cash
resources and the use of its revolving credit facility. (Logo:
http://www.newscom.com/cgi-bin/prnh/20001204/SDSLOGO) The proposed
offer has the unanimous support of Innova's Board of Directors,
which is recommending that Innova's shareholders accept the offer.
Shareholders holding approximately 61.8% of Innova's issued and
outstanding common shares have agreed to tender their shares to the
offer, including Innova's three largest shareholders, The VenGrowth
Investment Fund Inc., The VenGrowth II Investment Fund Inc. and The
Manufacturers Life Insurance Company, which together hold
approximately 58% of Innova's common shares. In addition, Mike
Kehoe, Innova's President and Chief Executive Officer and Keith
Carter, Innova's Vice-President and Secretary, who together hold
approximately 4% of the common shares, have also agreed to tender
their shares to the offer. The offer represents a 33 per cent
premium over Innova's closing share price of CDN $1.06 on the
Toronto Stock Exchange on August 23, 2004 and a 37 per cent premium
over Innova's 20-day volume weighted average share price of CDN
$1.03. The offer is expected to be mailed to Innova's shareholders
during the next two weeks and will remain open for 35 days. It will
be subject to customary conditions including that at least two
thirds of Innova's shares are tendered. Innova, which is
headquartered in Toronto, Canada, has a well-established presence
in the global dental implant industry, generating sales of CDN
$20.3 million in 2003. Its primary product, the Endopore dental
implant, which was developed in conjunction with the University of
Toronto Faculty of Dentistry, was the recipient of the highest
rating awarded for quality in a recent independent study of
implants that was published in the International Dental Journal.
Over the past five years, Innova has grown its total unit sales by
a compound annual rate in excess of 30%. Sybron intends to retain
Innova's sales force, including 22 representatives in North America
and Australia, as well as its manufacturing facilities in Toronto,
Canada and San Mateo, California. The acquisition is expected to be
earnings neutral to modestly accretive in the first year of
operations, as Sybron plans to reinvest the profits generated by
Innova to significantly expand the North American sales force over
the next several years. In fiscal 2006, the acquisition is expected
to be accretive to earnings and generate approximately CDN $5 to
$6.0 million in operating income. In ensuing years, Sybron believes
the operating income of Innova will grow by more than 30% annually.
"This acquisition marks our formal entrance into the rapidly
growing market of dental implants," said Floyd W. Pickrell, Jr.,
Chief Executive Officer of Sybron. "While the number of implants
placed annually has increased dramatically over the past several
years, it remains a market with vast potential and represents one
of the most exciting growth opportunities in the dental industry.
According to the U.S. Bureau of the Census, by 2005 approximately
40% of the entire U.S. population will be 45 years in age and over
-- the primary age market for dental implants. As the number of
consumers entering the primary age market increases and awareness
grows about the success of this treatment option, we believe the
rate of growth will remain robust for many years to come." "The
addition of Innova provides Sybron with a premier vehicle for
participating in the dental implant market, and we are pleased to
make this acquisition in a manner that will enable it to be
accretive in a short timeframe. Innova has a premium, highly
differentiated product line that offers significant advantages to
the clinician. We intend to manage this product line in a manner
similar to our endodontic business, with a dedicated direct sales
force and aggressive investment in new product development. This
strategy has enabled us to generate strong double-digit growth in
our direct sale endodontic product line over the past two years,
and we believe Innova will deliver similar results for Sybron as we
add more sales reps and they become fully productive." Expected
benefits from this acquisition include the following: * A strong
presence in one of the fastest growing areas of dentistry. The
worldwide dental implant market is estimated at US $1.2 billion and
growing at a compound annual rate of more than 15%. * Entree to two
new specialty markets that are the largest users of dental implants
-- oral surgeons and periodontists -- that will provide cross-sell
opportunities for Sybron's other product lines, such as the
recently acquired Bioplant synthetic bone regeneration product line
used in dental implant procedures. * The addition of a robust new
product pipeline that will allow Sybron to remain at the forefront
of emerging trends in the dental implant industry. Innova plans to
launch the Endopore Hybrid implant in September, which provides
dentists with a product that combines the unique biomechanical
properties of the Endopore implant with the immediate stabilizing
feature of threaded implants. An esthetic implant is also in
development for introduction in 2005. * Sybron's financial
resources will enable Innova to increase its marketing and
distribution network allowing it to capitalize on more
opportunities in the worldwide dental implant market. Michael
Kehoe, the current CEO of Innova, will continue to manage the
dental implant business. "We are very pleased to join forces with
Sybron Dental Specialties," said Mr. Kehoe. "For the past several
years, Innova has built a strong reputation for quality and
innovation in the dental implant market and attracted a growing
number of practitioners to our products. With the resources
provided by Sybron, we believe we can significantly broaden our
reach over the next few years and capture additional market share
both domestically and internationally." CAUTION REGARDING
FORWARD-LOOKING STATEMENTS -- Sybron Statements made in this press
release regarding future matters are forward-looking statements
within the meaning of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements,
including those dealing with Sybron's expectations as to sales
growth; the development and introduction of new products; the
growth rate of the market for dental implants; the growth of
Innova's operating income; and the effectiveness of the Company's
sales and marketing efforts are based on the Company's current
expectations. The Company's actual results may differ materially
from those currently expected or desired because of a number of
risks and uncertainties, including the level of demand for the
Company's products; integration of acquired operations; the
intensity of competition; and other factors affecting the Company's
business and prospects discussed in the filings made by the
Company, from time to time, with the SEC including the factors
discussed in the "Cautionary Factors" section in Item 7 of the
Company's most recent Report on Form 10-K and in its periodic
reports on Form 10-Q and 8- K (if any). The Company's undertakes no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future events or otherwise.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS -- Innova This news
release may contain projections and other forward-looking
statements regarding future events. Such statements are predictions
which involve known and unknown risks, uncertainties and other
factors which may cause the actual events or results to be
materially different. For information concerning factors affecting
Innova's business, the reader is referred to the documents that
Innova files from time to time with applicable Canadian securities
and regulatory authorities. About Innova LifeSciences Innova
(http://www.innovalife.com/) specializes in the development,
manufacture and global marketing of proprietary medical devices and
technologies, and is committed to continued profitable growth by
advancing its technology, enriching its value proposition for
customers and adding innovative complementary technologies.
Endopore, Innova's brand name dental implant system, is now used by
dental professionals in more than 20 countries as a preferred
technology to anchor dental prostheses such as dentures, partial
plates, bridgework and single teeth. A Canadian company, Innova was
founded in 1988 and its technologies are approved by a wide range
of health authorities, including the United States Food and Drug
Administration. About Sybron Dental Specialties Sybron Dental
Specialties (http://www.sybrondental.com/) and its subsidiaries are
leading manufacturers of value-added products for the dental and
orthodontic professions and products for use in infection control.
Sybron Dental Specialties develops, manufactures, and sells through
independent distributors a comprehensive line of consumable general
dental and infection prevention products to the dental industry
worldwide. It also develops, manufactures, markets and distributes
an array of consumable orthodontic and endodontic products
worldwide. http://www.newscom.com/cgi-bin/prnh/20001204/SDSLOGO
http://photoarchive.ap.org/ DATASOURCE: Sybron Dental Specialties,
Inc. CONTACT: Gregory D. Waller, Chief Financial Officer of Sybron,
+1-714-516-7400; or Michael Nealon, Chief Financial Officer of
Innova, +1-416-340-8818 Web site: http://www.innovalife.com/ Web
site: http://www.sybrondental.com/
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