Sunrise Medical of Torrance has agreed to acquire DeVilbiss Health Care, a fast-growing maker of home respiratory devices, in a deal valued at $130 million, Sunrise announced Wednesday.
Sunrise, which makes wheelchairs, hospital beds and other rehabilitative equipment, said it would be the largest-ever transaction in the home care manufacturing industry. The agreement calls for Sunrise to pay $71 million in cash and stock and to assume $59 million of DeVilbiss' debt, which will be paid off at the closing of the deal.
DeVilbiss, a private firm based in Somerset, Pa., was founded in 1888 by Dr. Allen DeVilbiss, who patented the throat atomizer. The company still makes a type of atomizer called a nebulizer, plus oxygen concentrators and other products that aid people with breathing and sleep disorders. It has 480 employees.
The company is an industry leader, controlling nearly one-fifth of the $500-million world market for its kinds of respiratory devices.
Richard H. Chandler, chairman and chief executive of Sunrise, called the deal "an important strategic milestone."
Analyst Mary Jennings of 13D Research said the acquisition "gets Sunrise into a part of the market with really good growth."
Chandler said the price--about 15 times DeVilbiss' estimated 1993 earnings of $9 million--is reasonable for a market leader that has grown at an annual rate of 15% over the last four years.
Both companies have extensive operations in Canada, Europe and Japan. Foreign sales account for about 30% of both companies' revenues, Chandler said.
Although DeVilbiss has performed well, it has also changed hands three times since 1988. Chandler said the deal with Sunrise would give DeVilbiss some respite from a turbulent period.
DeVilbiss' sales are expected to be $95 million for the year ending July 31. Sunrise, with 2,500 employees, had sales of $244 million for the year ended July 3, 1992.
Sunrise stock gained 75 cents to close at $24.25 in New York Stock Exchange trading.