Spectramed Approves Bid by British Firm

Spectramed, a Newport Beach medical equipment manufacturer with a tumultuous track record, said Thursday that it has agreed to be acquired by a giant British medical company for $100 million in cash.

The $12-per-share offer by London-based BOC Group represents a 140% premium over Wednesday’s closing price of $5 per share. Announcement of the deal caused Spectramed stock to soar to $11.50 per share Thursday on heavy volume of 2.2 million shares.

Spectramed said a subsidiary of BOC will make a cash tender offer for all of Spectramed’s 8.3 million shares outstanding. The transaction is subject to approval by the Securities and Exchange Commission.

Spectramed, which makes devices that measure blood pressure and cardiovascular performance in critically ill hospital patients, will become a wholly owned subsidiary of BOC after the acquisition.

Spectramed’s financial performance and stock price have fluctuated widely since the company was spun off in late 1986 from Gould Inc., an Illinois conglomerate that shed its medical products group so it could concentrate on computers and electronics.

The investors who bought Spectramed for $92 million included key members of its management team and the Robert M. Bass Group of Ft. Worth.

The Bass Group, known for its aggressive investments, remains Spectramed’s largest single shareholder, with 16.8% of the company’s stock.

Cut Debt Sharply

Weighed down with debt and caught in a price war with major competitors, Spectramed sustained losses of $3 million in 1986 and $2.5 million in 1987.

In June, 1987, Spectramed raised $40 million in an initial stock offering by selling 3.6 million shares at $11 each. A few months later, following the October stock market crash, Spectramed stock traded for as little as $1.50 a share.

With the money raised from the public offering, Spectramed was able to reduce its long-term debt by more than half. The company also sold its cardiopulmonary division, cut operating costs and consolidated its manufacturing operations.

The company returned to profitability in the first six months of 1988, posting earnings of $2.8 million on sales of $41.6 million.

Patricia Secrist, a BOC spokeswoman, said Spectramed is “a very good fit” for BOC, a $3-billion industrial gas and health-care company.

One of BOC’s health-care divisions, Anaquest in Madison, Wis., is a leading supplier of anesthetic pharmaceuticals in the United States. A BOC medical equipment subsidiary, Ohmeda, is based in Murray Hill, N.J.

Secrist said Spectramed’s products will complement BOC’s existing patient monitoring and intravenous therapy products and help to expand BOC’s presence the U.S. market.