Össur acquires two Swedish prosthetics companies

ÖSSUR has entered into definitive stock purchase agreements to acquire Pi Medical AB and Karlsson & Bergström AB. The closing is scheduled to take place at the end of the month, subject to customary conditions. Both acquisitions are structured as stock-for-stock transactions in which ÖSSUR will exchange a total of 6.9 million of newly issued shares for all outstanding shares of the Swedish companies. The total consideration is ISK 442 million based on the stock price in the transaction, excluding transaction expenses. Approximately one third of the total consideration, will be paid under an earn-out structure over a four-year period, subject to certain EBITDA thresholds. <br>
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ÖSSUR Nordic AB<br>
The two Swedish companies will be merged under the name ÖSSUR Nordic AB. The management group will consist of Yvonne Meyer, Managing Director, Jonas Bergström, Sales Director and Fredrik Meyer, Marketing Director. The new management team has decided to place headquarters and warehousing in Uppsala and having a sales office in Helsingborg.  A total of eight salespersons will work for the new company, visiting customers in Sweden, Norway, Denmark, and Finland. ÖSSUR Nordic AB will also handle sales and marketing to the Baltic countries. The new company will continue to put strong effort on finding the best solutions in prosthetics and orthotics and giving the best service to the customers. <br>
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"We are extremely excited that the previous owners of Pi Medical AB and Karlsson & Bergström AB  have decided to stay with the new company and become partners in the ÖSSUR family" says Mr. Jon Sigurdsson, Chief Executive Officer of ÖSSUR. <br>
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Mr. Sigurdsson continued: "We are particularly pleased that Yvonne Meyer will provide leadership together with Jonas Bergström and Fredrik Meyer.  They are highly experienced and proven leaders in the sales and marketing of prosthetic and orthotic products in the Scandinavian market".<br>
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Development of the ÖSSUR distribution network<br>
Sales network development is a stated strategic goal at ÖSSUR. After building up its US distribution network with the acquisition of Flex-Foot Inc. and the merger of the two companies' sales networks, ÖSSUR has now negotiated an agreement to acquire two large prosthetics' distributors in Scandinavia, who will be merged into the ÖSSUR Group. The purchase will boost company market access in Scandinavia and facilitate sales of total prosthetics solutions. Alongside prosthetics distribution, Pi Medical AB and Karlsson & Bergström AB earn part of their revenues in areas of orthotic products where ÖSSUR has not yet established a presence. <br>
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The Scandinavian market<br>
Pi Medical AB has been a global leader in marketing of ÖSSUR products, which it has distributed since 1986. Pi Medical AB also produces prosthetic and orthotic products and a staff of 17 is employed at the company.  <br>
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Karlsson & Bergström AB has built up the Flex-Foot distribution network in Scandinavia, and also handles distribution agreements for around 10 producers of prosthetics and orthotics. A staff of 12 is employed at Karlsson & Bergström AB.<br>
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Annual sales of both companies for this year is estimated ISK 668 million and an operating profit of ISK 70 million.  <br>
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Impact on consolidated financial statements<br>
ÖSSUR's operational forecast for the year 2000 assumes sales of ISK 3,210 million and gross operating profit of ISK 690 million. The consolidated statement of ÖSSUR will only be effected from this acquisition for two months this year. Including revenues from the Swedish companies, ÖSSUR's sales are now estimated at ISK 3,321 million, EBITDA ISK 702 million, and net losses ISK 3,766 million. Net income before amortisation of goodwill is estimated at ISK 334 million. Amortisation of the share purchases is estimated at ISK 416 million and will be expensed in its entirety this year.<br>
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