Interpore Sets Stock Swap With Ohio Medical Firm

Interpore International said Thursday it plans to merge with an Ohio maker of spinal implant devices in a tax-free stock swap valued at $26.3 million.

Shareholders of Cross Medical Products Inc. of Dublin, Ohio, will receive 1.275 shares of Interpore stock for each Cross share. The deal will create a company with combined 1997 revenue of $28 million.

The merger wasn’t well received on Wall Street. Interpore shares fell 22%, or $1.81 a share, to $6.44, while Cross Medical lost 13%, or $1.25, to close at $9.50. Both companies trade on the Nasdaq. Two brokerage firms downgraded Interpore to “hold.”

The headquarters of Interpore, a maker of synthetic bone-graft material, will remain in Irvine. David Mercer, Interpore’s chairman and chief executive, will retain those posts. Cross Medical president and chief executive, Joseph A. Mussey, will become president and chief operating officer.

Interpore also said that fourth-quarter net income soared to $1.9 million, or 25 cents a share, from a profit of $239,000, or 3 cents a share in last year’s final quarter. Quarterly revenue fell 38% to $3.3 million from $5.3 million.

The big profit, and the drop in revenue, came from the sale of its dental implant business.

For the year, Interpore earned $2.8 million, or 37 cents a share, compared with $658 million, or 9 cents a share, earned the previous year. Annual revenue fell 22% to $15.5 million from $19.9 million.