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Medtronic buying Xomed
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August 27, 1999: 11:35 a.m. ET
Company offers $800M stock for ear, nose and throat surgical products firm
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NEW YORK (CNNfn) - Medical device maker Medtronic Inc. agreed early Friday to pay about $800 million in stock for Xomed Surgical Products Inc., a maker of surgical products to treat ear, neck and throat conditions.
Under the deal, Xomed (XOMD) shareholders would get $60 in Medtronic (MDT) stock for each Xomed share, a 17 percent premium over Xomed's closing price Thursday. The per-share offer is subject to certain limitations.
Xomed shares rose immediately on news of the deal, gaining 6-3/16 to 57-7/16 by late morning. Medtronic dropped 2-1/4 to 74-7/16.
Minneapolis-based Medtronic said the deal will help it grow beyond its current product offerings. A maker of cardiac devices, the company last year expanded its product line to include equipment for neurological and spinal surgery with its $3.6 billion stock purchase of Sofamor Danek Inc.
"Xomed continues to introduce new technologies that will facilitate minimally invasive procedures in the ENT (ear, nose and throat) market in a field where many surgical techniques have remained unchanged for many years," Medtronic President and Chief Operating Officer Art Collins said in announcing the deal.
Xomed, based in Jacksonville, Fla., makes image-guided products to treat chronic sinusitis, which the company said affects more than 35 million Americans each year, as well as products to treat middle-ear infections, tonsil infections and sleep apnea. It has manufacturing facilities in Florida, Connecticut and France.
The deal, which requires approval by Xomed shareholders and regulators, will "contribute significantly" to Medtronic's revenue and earnings growth, Medtronic CEO William W. George said.
The companies expect the deal to close by the end of the year. 
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Medtronic
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