Davstar to Buy Minneapolis Company : Acquisition: Costa Mesa maker of medical products says it will pay $12.4 million in new shares of stock for privately held Dacomed.
Davstar Industries Ltd. said Monday that it will buy a Minneapolis-based medical-products company in a transaction valued at $12.4 million.
Dacomed Corp., a privately held company that makes urological products, had revenue of about $9 million for its latest fiscal year. Davstar, which designs and manufactures disposable medical products for hospitals, nursing homes and home health care, has annual revenue of about $4.5 million.
Michael A. Piraino, Davstar’s executive vice president, said Dacomed agreed to a sale in exchange for new shares of Davstar’s common stock so it can benefit from Davstar’s experience as a publicly traded company. “We bring the management team, and they get access to capital,” he said.
The combined companies, Piraino said, will operate under a new name, yet to be chosen.
Davstar, based in Costa Mesa, has about 150 employees, and Dacomed has about 75. Piraino said that the new company’s work force “will be less than the two combined,” but that executives have not yet decided where cuts will be made.
“I would expect their facility in Minneapolis will be restructured in some fashion,” he said. “More than likely some of the administrative duties and (manufacturing) tasks will move out here, and that facility will be more technical,” he said, focusing more on research and development.
Davstar’s president and chief executive, Charles A. Laverty, will be chairman and chief executive of the new company. Dr. Gerald W. Timm, founder and principal shareholder of Dacomed, will be vice chairman and executive vice president.
Piraino will become the chief operating officer, and Kevin Davidson, now vice president for finance at Dacomed, will be vice president of the new entity.
The deal is subject to approval by Davstar stockholders. Piraino said he does not expect it to be completed before the end of March.
Davstar’s stock was unchanged at $2.38 a share in Monday’s trading on the American Stock Exchange.
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At a Glance:
Davstar Industries
* Headquarters: Costa Mesa
* Founded: Aug. 28, 1985
* Officers of new company:
Charles A. Laverty, chairman and chief executive officer; Dr. Gerald W. Timm, vice chairman and executive vice president; Michael A. Piraino, chief operating officer; Kevin Davidson, vice president
* Employees: About 150
* Business: Designer and manufacturer of medical products.
Source: Davstar Industries Ltd.
Researched by VALERIE WILLIAMS-SANCHEZ / Los Angeles Times
