Baxter to acquire Synovis

Baxter International Inc. (NYSE:BAX) and Synovis Life Technologies, Inc. (NASDAQ:SYNO) today announced a definitive agreement for Baxter to acquire Synovis, a leading provider of biological and mechanical products for soft tissue repair used in a variety of surgical procedures. The acquisition complements and will expand the portfolio of Baxter's regenerative medicine and biosurgery franchise, which includes a number of devices and biological products for hemostasis, tissue sealing and adherence.

The Synovis board of directors has unanimously approved the transaction and is recommending that its shareholders approve the agreement at an offer price of $28 per share, which equates to $325 million of equity value or approximately $260 million after adjusting for the net cash.

Synovis develops, manufactures and markets medical devices used primarily in surgical procedures for soft tissue repair, including PERI-STRIPS DRY, TISSUE-GUARD and VERITAS Collagen Matrix. These products are used in a variety of surgical procedures, including obesity surgery; patching the lining of the brain, vessels, and cardiac defects; hernia repair, and vascular surgery.

The Synovis portfolio also includes products used in microsurgery such as the COUPLER, FLOW COUPLER and GEM MICROCLIP. These products are used for joining small diameter vessels during autologous tissue breast reconstruction; sealing small blood vessels; and head, neck and hand procedures.

Its newest business area is orthopedic and wound management products, with applications ranging from the repair of rotator cuff and other tendon injuries to advanced wound management. These products are primarily used by reconstructive, orthopedic, sports medicine, podiatric, and vascular surgeons.

"The medical device business that Synovis has built, and its technical capabilities to develop and manufacture surgical products, is highly complementary to Baxter's existing offering of BioSurgery products," said Ludwig Hantson, President of Baxter's BioScience business. "The combined business will offer surgeons in the United States and around the world a more complete line of innovative tools used to treat patients."

"We are enthusiastic about this transaction not only because it is beneficial to our shareholders and employees," said Richard Kramp, President and Chief Executive Officer of Synovis, "but also because the combination of Baxter's and Synovis' product portfolios will greatly expand the combined entity's presence in the exciting and expanding soft tissue repair market, benefiting patients worldwide."

Annual sales for Synovis were approximately $70 million in 2010, and Baxter expects the future top-line growth of this business to be accretive to the company's future sales growth.

Baxter expects this transaction to be dilutive to full-year 2012 earnings by approximately $0.04 per diluted share as a result of acquisition accounting and transaction-related expenses. The transaction is expected to be neutral to 2013 earnings and increasingly accretive thereafter.


Baxter International Inc.


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