ATI to Be Bought by Mediq Unit
ATI Medical Inc., a renter of medical equipment that has executive offices in Glendale and Las Vegas, has agreed to be purchased by a subsidiary of Mediq Inc. for $22 million.
The agreement, which is subject to approval by ATI’s stockholders, calls for Mediq/PRN Life Support Services Inc. to pay $4 for each of ATI’s 5.5 million total shares outstanding.
The companies said ATI Chairman Paul E. Stevenson and other ATI executives--who hold a combined 24% stake in ATI--have agreed to vote their shares in favor of the merger.
Mediq, based in Pennasauken, N.J., is a health-care services concern that also provides medical equipment rentals. The company had $295 million revenue in its fiscal year ended Sept. 30.
Michael F. Sandler, Mediq’s senior vice president for finance, said the companies had held periodic merger talks over the past year, and that Mediq was particularly interested in expanding its equipment rental business via ATI. He said it was “premature” to discuss whether the merger would result in layoffs of any ATI employees.
ATI, hobbled by softening demand and price-cutting in the market for hospital-equipment rentals, has been struggling lately. In its fiscal year ended July 31, the company lost $1.5 million on revenue of $53.7 million.
Last week, ATI said it lost an additional $185,400 in its fiscal first quarter ended Oct. 31, compared with a year-earlier loss of $290,800. ATI’s first-quarter revenue, meanwhile, edged up to $13.2 million from $13 million.
As a result, Mediq’s purchase price is well below the $5.50-a-share peak that ATI’s stock has reached over the past year. The stock closed Monday at $3.375 a share in American Stock Exchange composite trading.
Stevenson said that in light of ATI’s losses, the Mediq proposal “was in the best interest of our stockholders.”