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Cardiac Science Offers $143 Million for Spacelabs

November 28, 2000|From Times Wire Services

Cardiac Science Inc. is offering to acquire Spacelabs Medical Inc., a maker of patient-monitoring devices and clinical information systems, for $143 million.

Cardiac, which makes heart defibrillators, said Monday it would pay $15 a share, up 13% from the stock's closing price Friday. The bid is 45% above Spacelabs' share price on Nov. 13, when Cardiac Science in Irvine first offered to buy the Redmond, Wash., company.

The companies did not release details of the first offer, which Spacelabs rejected.

Cardiac Science, which wants to include its automatic defibrillator monitors in Spacelabs' monitors for hospital patients, said it would pay cash, stock or a combination of the two for Spacelabs.

Cardiac Science monitors can automatically trigger defibrillators without staff intervention if an irregular heart rhythm is detected.

Spacelabs, which posted 1999 revenue of $300.3 million, has installed about 65,000 hospital patient monitors, which Cardiac Science believes it can use to generate significant revenue. For the nine months ended Sept. 30, Cardiac had revenue of $2.76 million.

In a letter to Spacelabs, Cardiac Science acknowledged that Spacelabs had rejected the initial offer, but Cardiac continued to press its case, saying it already has secured financing for the deal.

The offer "provided greater value to Spacelabs' shareholders than could be achieved by Spacelabs as a stand-alone company, now or in the foreseeable future," the letter said.

In fact, Cardiac Science said Spacelabs' results over the last several years "are indicative of a company with deteriorating operating performance," noting that the company's revenue has remained flat since 1992.

Spacelabs didn't return calls for comment. The company had about 9.55 million outstanding shares as of Oct. 27, according to a regulatory filing.

The company's stock was unchanged at $13.25. Cardiac Science's shares rose 69 cents, or 11%, to $6.69. Both stocks trade on Nasdaq.

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