CBYX
Advanced Neuromodulation Systems Proposes Entering Into Merger Discussions With Cyberonics; ANS` Proposes $22.00 Per Share as Merger Consideration
September 15, 2004 07:45:00 (ET)
DALLAS, Sep 15, 2004 (BUSINESS WIRE) -- Advanced Neuromodulation Systems, Inc. (ANS) (ANSI, Trade) announced today that it has proposed to Cyberonics, Inc. (CYBX, Trade) President and Chief Executive Officer Robert "Skip" Cummins that the two companies meet immediately to investigate the possibility of a merger. ANS also stated that based on Cyberonics' publicly available information, ANS is prepared to offer Cyberonics shareholders $22.00 per share payable in a combination of cash and stock, a premium of 47% to Cyberonics' closing price of $14.95 on August 19, 2004, the day before ANS announced that it had acquired 14.9% of Cyberonics' outstanding common stock, and a premium of 29% to Cyberonics' closing price of $17.05 on September 13, 2004.
"As the only two publicly-held 'pure play' neuromodulation companies, a combined ANS and Cyberonics could build a world-class company that offers the most technologically advanced implantable devices on the market to address pain, epilepsy, and in the future, many other neurological conditions. We believe that a combined ANS and Cyberonics would create significant synergies in technology development, manufacturing, sales and marketing, regulatory, administrative and other areas, and create a company that is even better positioned to aggressively compete and innovate in the expanding neuromodulation field. We further believe that the combination provides the best financial opportunity for Cyberonics' shareholders, as they could participate in the ownership of a company with revenues in excess of $200 million focused on the electrical stimulation market," said Chris Chavez, President & Chief Executive Officer of ANS.
Mr. Chavez added that ANS is in a strong financial position and is confident that financing is available for a sizeable cash component in the proposed transaction with Cyberonics. In addition, said Mr. Chavez, "a stock component presents an outstanding opportunity for Cyberonics shareholders to participate in the future of the combined entity, and we will endeavor to structure the transaction to provide tax-deferred treatment to those shareholders who receive stock."
"We believe that a combination of ANS and Cyberonics would utilize Cyberonics' significant sales and marketing investment in its neurological call point to facilitate ANS' future entry into complementary deep brain stimulation applications, including Parkinson's Disease and Essential Tremor," Chavez said. "It also would create a substantial intellectual property portfolio and better employ clinical and engineering talents to simultaneously pursue multiple strategic initiatives with greater speed and with lower overall risk. A combination would also diversify our revenue streams across multiple therapeutic areas and physician call points."
Chavez added, "Although we are pleased with our investment in Cyberonics, we also hope that the Cyberonics Board will recognize the powerful business logic behind our proposal and that the Board will authorize proceeding expeditiously with discussions with us. Our proposal offers Cyberonics shareholders a significant premium over the market price of their common stock, and we believe that Cyberonics' shareholders would view our proposal as fair and highly attractive. We look forward to an immediate and favorable response from Cyberonics to our proposal to discuss the possibility of a combination."
ANS will file an amendment to its previously-filed Schedule 13D with the Securities and Exchange Commission, which amendment will include the contents of the letter delivered to Mr. Cummins. The text of the letter is also included below.
About Advanced Neuromodulation Systems
Advanced Neuromodulation Systems designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain and other disorders of the central nervous system. Additional information is available at www.ans-medical.com.
"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995:
Statements contained in this document that are not based on historical facts are "forward-looking statements." Terms such as "plan," "should," "would," "anticipate," "believe," "intend," "estimate," "expect," "predict," "scheduled," "new market," "potential market applications" and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to Cyberonics' growth potential and future prospects; the uncertainties inherent in proposed business combinations, including the uncertainty that a combination would be of interest to Cyberonics, its Board of Directors or its shareholders, or could be consummated on terms acceptable to Cyberonics or at all; investment risks, including the risk of adverse changes in the value or marketability of Cyberonics securities that the Company owns; competition from and the launch of new competitive products by Medtronic, Advanced Bionics/Boston Scientific or others, as well as other market factors, that could impede growth in or reduce sales of the Company's IPG and RF systems, which could adversely affect revenues and profitability; continued market acceptance of the Genesis(R) IPG and GenesisXP(TM) IPG;; continued market acceptance of the Renew(R) system; patient or physician selection of less invasive or less expensive alternatives; adverse changes in coverage or reimbursement amounts by Medicare, Medicaid, private insurers, managed care organizations or workers' comp programs; intellectual property protection and potential infringement issues; the cost, uncertainty and other risks inherent in the intellectual property litigation against Advanced Bionics; obtaining necessary government approvals for the Company's rechargeable IPGs and other new products or applications and maintaining compliance with FDA product and manufacturing requirements; product liability; reliance on single suppliers for certain components; completion of research and development projects in an efficient and timely manner; the satisfactory completion of clinical trials and/or market tests prior to the introduction of new products; successful integration of acquired businesses, products and technologies; the cost, uncertainty and other risks inherent in patent and intellectual property litigation; international trade risks; and other risks detailed from time to time in the Company's SEC filings. Consequently, if such management assumptions prove to be incorrect or such risks or uncertainties materialize, anticipated results could differ materially from those forecast in forward-looking statements. There can also be no assurance as to whether or when the Company might sell or otherwise dispose of all or part of any of the securities of Cyberonics that it beneficially owns. In reaching any decision as to its course of action, including without limitation, its willingness to consummate a combination, the Company currently expects that it would take into consideration a variety of factors, including, but not limited to, Cyberonics' revenue growth potential, cost structure, business and prospects, other developments concerning Cyberonics and its business generally, other business opportunities available to the Company and changes in law and government regulations, general economic conditions and money and stock market conditions, including the market price of the securities of Cyberonics. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
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