Henley Group in Agreement to Buy Imed
Henley Group, the recently formed Allied-Signal spinoff, on Friday said it signed a definitive agreement to purchase San Diego-based Imed from Warner-Lambert Co. for $163.5 million.
Imed, a medical technology firm that has 1,200 employees in San Diego, will join a Henley health technology division that includes Pittsburgh-based Fisher Scientific and Boston-based Instrument Laboratories, according to Henley Chairman Michael Dingman.
“I think the important thing (for Imed) is that employees know they’re going to be . . . part of a successful company that’s devoting a good part of its efforts to the health technology market,” Dingman said in an interview Friday.
Dingman said the Imed acquisition would help Henley create “a significant health technology group with something close to $1 billion in revenues.”
Imed recorded $100 million in revenues last year, according to a Warner-Lambert spokesman.
Sources of Financing
Henley will use its existing $450 million of available credit lines or a soon-to-be-completed $200 million equity offering to finance the acquisition, Dingman said.
The Imed sale will complete Warner-Lambert’s ongoing divestiture of its health technology businesses. Warner-Lambert, which purchased Imed in 1982 for $468 million, previously announced the sale of its other health technology ventures--Desert Medical and Reichert Scientific Instruments.
Henley’s acquisition of Imed seemed to substantiate concerns voiced in 1982 by industry analysts who were concerned that Warner-Lambert had paid too much for the fast-growing, closely held company that San Diegan Richard A. Cramer created in 1972.
Although the company posted a $20-million profit in 1982 on revenues of $85 million, analysts have suggested that the company has not turned a profit for Warner-Lambert in several years. A Warner-Lambert spokesman declined to comment on Imed’s profitability.
Imed competes against Ivac Corp., another company founded by Cramer which is now owned by Eli Lilly & Co.. It competes also against a division of Baxter-Travenol Laboratories.
The Securities and Exchange Commission is currently examining the creation of Henley, an independent company that Allied-Signal has formed to operate nearly 35 businesses being divested by Allied-Signal. That SEC review could be completed within the next two weeks, and a planned equity offering could be completed during the next two months, Dingman said on Friday.