News | Cardiovascular Business | November 04, 2015

Bard Agrees to Acquire Full Ownership of its Joint Venture in Japan

Company expects to see future growth opportunities in peripheral vascular and vascular access markets

November 4, 2015 — C.R. Bard Inc. announced in late September that it has entered into a definitive agreement to acquire Kobayashi Pharmaceutical’s 50 percent ownership share in Medicon Inc., the Osaka, Japan-based joint venture of the two companies, through a share redemption. The transaction is expected to close in early November 2015, after which Medicon will be a wholly-owned subsidiary of the company. The transaction has been approved by each company’s board of directors and is subject to customary closing conditions.

Bard and Kobayashi have jointly operated Medicon for over 40 years. In recent years, Medicon has built clinical and regulatory capabilities that have allowed the business to more effectively introduce new products. At the same time, Bard has demonstrated the ability to execute its product leadership strategy with a direct selling model in international markets. Today, the company believes that the future growth opportunities in Japan will come from market segments that are more clinically differentiated, including peripheral vascular and vascular access. Therefore, the company believes that now is the time to take a more direct role with clinicians and patients in Japan.

The company expects the transaction to add approximately $40 million to 2016 net sales. On an operational basis (excluding the impact of foreign exchange), the company expects the transaction to be neutral to adjusted cash earnings per share both in the fourth quarter of 2015 and the full-year 2016, and to be accretive thereafter. Including the impact of foreign exchange, the company expects the transaction to reduce fourth quarter 2015 and full year 2016 adjusted cash earnings per share by approximately 5 cents and 20 cents, respectively.

As consideration for the transaction, Kobayashi will receive 3 billion yen at closing. Kobayashi will also receive the following additional payments annually on the anniversary date of the transaction: 1.9 billion yen in 2016, 1.5 billion yen in 2017, 1.2 billion yen in 2018, 1 billion yen in 2019, 600 million yen in both 2020 and 2021, 400 million yen in both 2022 and 2023, and 300 million yen in both 2024 and 2025; the total consideration being 11.2 billion yen.

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