Specialized Health Products International (SHPI) and Med-Design have announced a merger agreement that would create a leading firm providing technology for safety medical needles.
The boards of directors of both companies have unanimously approved the merger agreement and will recommend their stockholders vote in favor of the transaction. The merger is anticipated to close no later than the first quarter of 2006, subject to the approval of stockholders of each company and customary closing conditions.
"By combining these two independently growing technology companies into one stronger, more efficient entity, we expect to expand our presence in safety medical needles and create new opportunities to drive profitable growth," said Jeff Soinski, president and CEO of SHPI.
"We expect to achieve significant cost-savings as a result of the merger," he added. "Due to our significant overlap in capabilities, personnel and corporate and operational infrastructure, we anticipate being able to reduce our combined annual expenses by approximately $4 million to $5 million, or approximately 70 percent to 85 percent of Med-Design's stand-alone expenses on an annual basis."
Under the merger agreement, stockholders of Med-Design will receive equity of SHPI equal to roughly 33 percent of the shares outstanding of the combined company following the merger. For the 12 months ended Sept. 30, on a combined basis, the companies reported revenue of $9.8 million. If approved, the combined firm plans to change its name to Salus Medical. Salus is Latin for "health, safety, well-being." Med-Design will become a wholly owned subsidiary of Salus Medical.
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