Company Ends Merger Talks With Birtcher
A Pennsylvania surgical-equipment manufacturer said Monday that it has broken off merger talks with Birtcher Medical Systems Inc. of Irvine.
As a result, electrosurgery-tool manufacturer Birtcher Medical said it has reactivated plans for a previously announced public offering of common stock.
Cabot Medical Corp. of Langhorne, Pa., which makes operating room instruments, gave no specific reason for ending its talks with Birtcher. The negotiations were announced last month when Cabot said it had tentatively agreed to merge with Birtcher in an all-stock transaction.
“As the deal unfolded, there came to the surface certain issues,” said Marvin Sharfstein, Cabot’s vice president of business development. He said the company has been advised by legal counsel not to discuss the specific reasons for ending the talks.
“It is a disappointment,” Sharfstein said, “and you can’t say more than that.”
He added, however, that Cabot had been “emotionally committed, financially committed” to a merger because of the staff time spent analyzing the proposed deal.
Birtcher officials declined to comment on the reasons for the failed talks.
The companies said in March that the merger would enable the combined entity to become a major player in the emerging market for laparoscopic surgery, which uses miniature instruments, including television cameras, that can be inserted through a tube in a patient’s abdomen. The procedure is used to minimize incisions and is much less invasive than other surgical methods.
Birtcher and Cabot had planned to exchange shares of stock at the ratio of 0.75 of a share of Cabot stock for one share of Birtcher. The deal would have been worth about $65 million.
Birtcher stock, traded over the counter, closed Monday at $12.75 per share, down 75 cents. The stock shot up to $14.50 the day that the Cabot offer was announced.
The Irvine firm said it will go ahead with a previously planned offering of 1.5 million common shares that had been postponed after Cabot’s proposal.
The company moved to Orange County from El Monte last year. It is not related to a Laguna Niguel development firm also named Birtcher.
