Beckman Instruments, the Fullerton-based maker of scientific and medical instruments, hopes to raise from $100 million to $115 million in a public offering designed to spin off 17% of the company from its corporate parent, SmithKline Beckman Corp., according to documents filed with the Securities and Exchange Commission.
A stock offering prospectus released Friday by Beckman said the company plans to offer 5 million newly issued shares of common stock at between $20 and $23 a share. Of those shares, 4 million will be marketed in the United States and 1 million are to be offered overseas.
Beckman stock has not been publicly traded since the company was acquired by Philadelphia-based SmithKline for $1 billion in 1982, a merger that formed SmithKline Beckman.
The decision to begin placing Beckman shares on the market was made in part to give the firm a greater business identity, officials said. The capital raised in the offering also will help improve SmithKline Beckman’s financial picture. The offering originally was announced last week as part of a corporate rescue plan for SmithKline.
Beckman Instruments’ net earnings, after taking a tumble following the introduction of new Medicare cost-containment policies in 1983, increased to $38.9 million in 1987 from $24.4 million in 1986. By contrast, the earnings of SmithKline’s core pharmaceutical business currently are in a decline.
In stating the reasons for the offering, the prospectus said “the management of SmithKline Beckman believes that the value of SmithKline Beckman’s diagnostic and analytical instrument business has been and continues to be inadequately reflected in the SmithKline Beckman share price. This belief has been reinforced by the company’s recent record of sales and earnings growth.”
The prospectus also said SmithKline Beckman believes that recapitalization of Beckman through the public offering will enhance the value of SmithKline Beckman stock.
About 93% of the proceeds from the stock sale, after deducting underwriting discount and expenses, will be used by Beckman Instruments for general working purposes, the company said, including repayment of a portion of Beckman’s outstanding debt and investment in short-term, interest bearing securities.