Blog Coverage ICU Medical Announces a Billion Dollar Deal with Pfizer

LONDON, UK / ACCESSWIRE / October 7, 2016 / Active Wall St. blog coverage looks at the headline from ICU Medical, Inc. (NASDAQ: ICUI). On October 6th, 2016, ICU Medical and Pfizer Inc. (NYSE: PFE) announced a definitive agreement under which ICU Medical will acquire all of Pfizer’s global infusion therapy business, Hospira Infusion Systems, for $1 billion in cash and stock. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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The Hospira Infusion Systems business includes IV pumps, solutions, and devices that, when combined with ICU Medical’s existing businesses, will create a leading pure-play infusion therapy company, with estimated pro-forma combined revenues of approximately $1.45 billion based on trailing twelve month results as of June 2016. ICU medical generated $342 million in revenue last year. Pfizer had acquired the infusion-systems assets as part of its $17 billion purchase of Hospira in February 2015.

Terms of Agreement

Pursuant to terms of the agreement, Pfizer will receive $600 million in cash from ICU Medical and approximately $400 million in newly issued shares of ICU Medical common stock, subject to customary adjustment for net working capital. Upon completion of the transaction, which the companies expect to occur in the first quarter of 2017 subject to customary closing conditions including required regulatory approvals, Pfizer will own approximately 16.6% of ICU Medical. Additionally, the New York based Pharma giant will have the right to nominate one director to the company’s board of directors in ICU Medical’s proxy materials as long as it continues to hold 10% or more of ICU Medical’s common equity, Pfizer has also agreed to certain restrictions on transfer of its shares for at least 18 months.

John Young, Group President of Pfizer Essential Health commented:

“We are pleased that Hospira Infusion Systems is combining with ICU Medical, and we believe the combined company will be well positioned in the marketplace to deliver value to customers through its strong product portfolio and the expertise of colleagues from both companies. I’m proud of the Hospira Infusion Systems team and their positive impact on patients around the world.”

Synergy

The acquisition complements ICU Medical’s existing business by creating a company that has a complete IV therapy product portfolio from solutions to pumps to non-dedicated infusion sets, and gives the company a significantly enhanced global footprint and a platform for continued competitiveness and growth. With an integrated product offering, ICU Medical will hold industry-leading positions in key segments and have access to the full US infusion marketplace.

Vivek Jain, ICU Medical’s Chief Executive Officer, stated:

“By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company.”

ICU Medical Q3 Preliminary Results and Fiscal Year 2016 Guidance Update

For Q3 2016, ICU Medical expects to report quarterly revenue of approximately $96 million and adjusted EBITDA of approximately $33.5 million, and $1.20 adjusted earnings per share. For FY16, ICU Medical expects to report results slightly above the high-end of its previously announced guidance of $370 million revenue, $131 million adjusted EBITDA, and $4.60 adjusted diluted earnings per share.

Stock Performance

On Thursday, October 06, 2016, following the announcement of the deal, ICU Medical’s shares surged 14.86%, finishing the day at $144.68 with volume of 1.21 million shares exchanging hands by the close of the trading session, which was higher than the three months of 92.10 thousand shares. The company’s stock price rallied 13.40% in the last month, 25.81% in the past three months, and 45.26% in the previous six months. Furthermore, on a year to date basis, the stock gained 28.29%. Shares of the company have a PE ratio of 43.14.

Pfizer’s share price finished yesterday’s trading session at $33.65, sliding 0.74%. A total volume of 15.95 million shares exchanged hands. The stock has advanced 5.33% and 4.71% in the last six months and past twelve months, respectively. Furthermore, since the start of the year, shares of the company have gained 7.12%. The stock is trading at a PE ratio of 29.86 and has a dividend yield of 3.57%.

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