Imed’s 1st Public Offering Could Raise $55 Million

Imed Corp., a San Diego-based health care company that has changed ownership three times in the past decade--at successively lower prices--plans an initial public stock offering this fall that could raise up to $55 million.

Imed makes a line of infusion pumps and disposable accessories that deliver intravenous drugs to hospital patients. The company, which has 526 employees in San Diego and 1,100 overall, reported sales of about $90 million last year.

Imed is 72% owned by Advanced Medical of San Francisco, a publicly owned holding company whose principal asset is Imed. Advanced Medical said it will sell a maximum 22% interest in Imed to the public so it can retain majority control after the stock offering. Proceeds from the stock sale will be used to pay off loans taken on by Advanced Medical to buy Imed.

A sale of 22% of Imed stock for $55 million would give the company a market value of $250 million, more than double what Advanced Medical paid for the company last year.

Imed, which was founded in the early 1970s by San Diego entrepreneur Richard Cramer, introduced the first volumetric drug infusion pump in 1974. Cramer started Imed after being forced out in a bitter proxy fight at San Diego-based Ivac, which was later acquired by Eli Lilly.

After building Imed into a highly successful health care company, Cramer and associates sold it in 1982 to Warner-Lambert for $460 million. The deal was one of the largest transactions in San Diego corporate history, and made millionaires of Cramer and two dozen executives and investors, most of them San Diegans.

But Imed’s performance suffered under the Warner-Lambert umbrella. So much so that Cramer, as chief executive of Fisher Scientific, a medical products subsidiary of Henley Group, engineered the purchase of Imed by Fisher Scientific for $165 million in 1986, or less than half what Warner--Lambert had paid. Cramer left Fisher Scientific in 1989 and is now a San Diego-based venture capitalist.

In a heavily financed deal, Advanced Medical in 1990 bought a 93% interest in Imed from Henley Group for $106 million. The value of Imed had fallen sharply over the four-year period, even though the size of the company was essentially the same as when Fisher Scientific acquired it, Imed Chief Financial Officer Stan Anders said Monday.

Since it acquired Imed, Advanced Medical has traded an 11% interest in the company to inventor Dean Kamen in exchange for rights to Kamen’s infusion pump technology patents. GE Capital Corp., which financed Advanced Medical’s acquisition of Imed, now owns a 10% interest through stock warrants. Henley Group retains its 7% share of Imed stock.

For the first quarter ended March 31, Imed reported a “break-even” quarter on $27 million in sales, Anders said. For the same quarter in 1990, Imed’s sales on a pro forma basis were about $27.5 million. Imed’s chief executive is Jack Sparacio, who joined the company in March after a stint at Advanced Technology Laboratories in Seattle, Anders said.

Advanced Medical reported a 1990 loss of $20.7 million on revenue of $91 million. Advanced Medical’s net worth was minus $9.7 million as of the end of March.

Net proceeds to the company from the offering will be used to reduce the company’s long-term debt, which now totals $72 million. The offering will be managed by Kidder, Peabody & Co. and Montgomery Securities. The company has applied to have its shares listed on the New York Stock Exchange.