ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, February 27, 1996 TAG: 9602270092
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
Sterile Concepts Holdings Inc., a surgical instrument company with its roots and many shareholders in Roanoke, led its own parade on Wall Street on Monday. As investors reacted to news that the company has a buyout offer pending, the price of its stock grew on a percentage basis more than any other issue on the New York Stock Exchange.
Richmond-based Sterile Concepts, which was spun off by Carilion Health System of Roanoke in 1994, has been considering a previously undisclosed $118-million offer from Maxxim Medical Inc. of Sugar Land, Texas.
Maxxim Medical on Feb. 14 offered to pay cash or issue stock in an amount equal to $16 per share of Sterile Concepts' stock, 25 percent more than the previous day's closing price. But the offer stayed under wraps.
Maxxim Medical made its offer public at the start of business Monday because it did not have a response, saying it wanted to make shareholders aware of the proposal. Sterile Concepts still had no official response, and spokesman David Jordan said Monday that he did not know when the company will reply to Maxxim Medical.
However, news of the offer triggered a buying frenzy.
Sterile Concepts' stock, which sold at $13 a share Friday, closed Monday at $16.75, a gain of 29 percent. The stock outperformed the more than 3,100 other issues on the exchange, a spokeswoman said. That was a first for Sterile Concepts, according to Jordan.
Nearly 490,000 shares changed hands, compared with about 15,000 or fewer any day in the last month. Maxxim's stock slid with the rest of the market, closing at $18.871/2, down 371/2 cents, trading about 33,100 shares on the New York exchange.
As part of the offer, Maxxim also said it would take on about $29 million of Sterile Concepts' debt, making the value of the proposed deal $118 million.
Sterile Concepts controls 19 percent of the $1 billion market for sterile surgical equipment trays used in hospitals, surgery centers and clinics; Maxxim's share is 12 percent, Jordan said. But Maxxim, which also distributes products used in physical therapy and home pain management, has higher overall sales. The surgical instrument tray business leader is Baxter International, Jordan said.
Sterile Concepts reported earnings of $8.2 million, or $1.48 per share, on revenues of $146.8 million during the year that ended Sept. 30. Also last year, Sterile Concepts bought two smaller competitors, Medical Design Concepts of Temucula, Calif., and Associated Medical Products, a privately held company based in Minnetonka, Minn.
Maxxim earned $2.9 million, or 36 cents per share, on sales of $265.7 million in its fiscal year ended Oct. 31.
LENGTH: Medium: 55 linesby CNB