Ossur hf. signs merger agreement with Flex-Foot Inc.

Ossur hf. (Orthotics and Prosthetics manufacturer), symbol HL/OSSUR, a pioneer in the development and commercialization of prosthetic devices with the world's leading market position in socket technology, today announced that it has signed a definitive agreement to acquire Flex-Foot, Inc., a privately-held prosthetic manufacturer based in Aliso Viejo, California, USA, and the leading high technology innovator and provider of premium prosthetic devices and related componentry.  <br>
<br>
The transaction, which is structured as an all-cash purchase of Flex-Foot's common stock, is subject to normal closing conditions and is expected to close in early April 2000.  Financial terms were not disclosed.  <br>
<br>
"We are extremely enthusiastic about the potential to combine two of the world leaders in high technology innovation for prosthetic devices," said Jon Sigurdsson, Chief Executive Officer of Ossur. "We are particularly pleased that we could acquire the preeminent company in the high performance segment of the prosthetic industry with 1999 revenues of USD$27.9 million.  Most importantly, our combined customer base of prosthetists and amputees will benefit enormously from this combination.  This merger accelerates our capability to offer our customers a complete system sale, with all premium prosthetic componentry available through one source."<br>
<br>
Mr. Sigurdsson continued:  "Our interest in this combination was solidified by our desire to work closely with the existing management team at Flex-Foot.  Together, we intend to build the world's leading prosthetic firm, and we look forward to working with our colleagues at Flex-Foot to increase our internal growth rate and to pursue additional strategic acquisitions."<br>
<br>
Mr. Sigurdsson and Maynard Carkhuff, Flex-Foot's president, issued a joint statement to the employees and customers of both companies saying:  "The merger of Ossur and Flex-Foot will combine the leading branded product lines in the prosthetic industry.  The ongoing success of both companies' existing products will be strengthened and the potential for collaboration in important areas, such as research and development, will enhance new product introductions.    The companies will continue to operate under their existing names, and the Ossur, Flex-Foot and Mauch brands, which are recognized worldwide, will continue to be marketed." <br>
<br>
Mr. Sigurdsson and Mr. Carkhuff added, "We believe we can strengthen the financial performance of both companies and realize attractive results from this combination for several reasons.  First, by leveraging both companies' leading research and development and sales and marketing efforts, we believe we can introduce new products and grow revenue and profits at a higher rate than as stand-alone entities.  Second, Ossur will be able to capitalize on Flex-Foot's extensive U.S. and international infrastructure, which includes direct sales efforts in the U.S. and several European countries, to strengthen the marketing of Ossur products.  In turn, sales of Flex-Foot products will benefit from utilizing Ossur's established marketing and distribution channels in international markets.  Third, demand for high technology componentry is increasing in the prosthetic market as the amputee population prefers products with superior function and improved comfort. Companies with a broad and complete portfolio of high technology componentry, such as Ossur and Flex-Foot, stand to benefit significantly from this trend."  <br>
<br>
Ossur hf is a leading designer, manufacturer and marketer of prosthetic products and techniques.  The Company's products are used by prosthetic medical specialists and their patients in non-surgical therapy to treat such patients with conditions resulting from degenerative diseases, trauma and sport-related injuries.  Over three percent of the population of Iceland participated in Ossur's successful initial public offering on the Icelandic Stock Exchange last year.  Ossur has enjoyed substantial growth and profitability and has firmly established itself in international markets, with 90% of its total income based on exports.  <br>
<br>
Flex-Foot, Inc. is the leading high technology innovator and premium provider of prosthetic devices and related componentry.  With fourteen commercialized products lines supported by 29 distinct patents in over 20 countries, Flex-Foot has grown revenue and market share every year since inception, producing compound annual growth of 30% in revenue and 28% in pre-tax earnings since 1984.  Flex-Foot enjoys the leading, branded market position in the premium performance, high activity sector of prosthetic devices and has successfully penetrated the moderate activity sector with new product introductions to capture a broader segment of the market.<br>
<br>
Ossur hf. will pay $72 Million for the shares in Flex-Foot Inc. Combined revenues for the year 1999 were ISK 3,300 Million with an after-tax profit of ISK 365 Million.<br>
<br>