Mallinckrodt Issues Assurances on Debt

Medical company Mallinckrodt Inc. tried to assure investors that it will work quickly to reduce the massive debt that will accompany its planned $1.9-billion acquisition of Pleasanton-based Nellcor Puritan Bennett Inc. Mallinckrodt Chief Executive Raymond Holman acknowledged the high debt load could be risky but said the deal is key to its goal of expanding in the health-care industry. St. Louis-based Mallinckrodt said the acquisition of the medical-device company will dilute its earnings by 15% in its current fiscal year ending in June but will boost results by 10% to 15% in the following year. It also said it intends to take a one-time charge of $325 million to $600 million against earnings in the current year. Mallinckrodt stock lost $1.50 to close at $38.25 on the New York Stock Exchange. Nellcor Puritan stock soared $7.16 to $28.09 on Nasdaq.