West Pharmaceutical Services, Inc and The Tech Group Announce Acquisition Agreement
West Pharmaceutical Services, Inc and The Tech Group Announce Acquisition Agreement
29 Apr 05
Move Expands West Pharmaceutical Services Presence in Healthcare Markets
LIONVILLE, Pa., and SCOTTSDALE, Ariz., -- West Pharmaceutical Services, Inc. (NYSE: WST) and The Tech Group today announced a definitive agreement for West to acquire the business assets of The Tech Group, Inc., a privately owned company headquartered in Scottsdale, AZ. The Tech Group manufactures plastic components and assemblies for the pharmaceutical, medical device, consumer products and personal care markets. The transaction remains subject to clearance under the Hart-Scott-Rodino Act but is expected to close in May 2005.
West will pay $140 million in cash for the assets, which include nine production facilities in Arizona, Michigan, Indiana, Puerto Rico, Mexico and Ireland. West will not acquire The Tech Group's ownership interest in Tech Group Asia. A portion of the purchase price is deferred and contingent on the performance of the business in 2005 and 2006. The acquisition will be financed from available cash and new bank and private lender debt. West anticipates that The Tech Group's business will add between $0.02 and $0.05 to its diluted earnings per share for 2005 on sales for the remainder of the year of approximately $70 million. If combined for all of 2005, West's U.S. plastics molding business and the acquired business would generate estimated sales of $180 million.
"This acquisition is a key part of our strategy to create a platform for sustainable growth that leverages our global position in the healthcare markets, in addition to our manufacturing and regulatory expertise," commented Donald E. Morel, Jr., Ph.D., West's Chairman and Chief Executive Officer. "West's goal for this acquisition is to make sure that The Tech Group continues to have the resources and operating focus to deliver on its commitments to its customers while expanding future opportunities through West's global presence and customer base. As a result of this acquisition, West will be positioned as a significant player in manufacturing high-precision plastic components and devices for the medical and consumer markets."
Steve Uhlmann, Chairman of The Tech Group, added, "We believe the acquisition by West Pharmaceutical Services provides a wider and more stable global footprint for both businesses. As a combined business, The Tech Group and West Pharmaceutical Services will be positioned as a key player in the growing medical device and consumer markets."
The Tech Group will maintain its current business and operating structure through an interim period and will report to Dr. Morel. The Tech Group business and management team will remain headquartered in Scottsdale, AZ.
About West Pharmaceutical Services, Inc.
West Pharmaceutical Services, Inc. is the world's premier manufacturer of components and systems for injectable drug delivery, including stoppers and seals for vials, and closures and disposable components used in syringe, IV and blood collection systems. The Company also provides products with application to the personal care, food and beverage markets. West's customers include the world's leading pharmaceutical, biotechnology, generic drug and medical device producers. Headquartered in Lionville, Pennsylvania, West Pharmaceutical supports its partners and customers from 50 locations throughout North America, South America, Europe, Mexico, Japan, Asia and Australia. For more information, visit West at http://www.westpharma.com
About The Tech Group
The Tech Group offers contract manufacturing solutions for the medical, and consumer industries. Its customers include leaders in the healthcare, packaging and consumer/technology industries. The Tech Group is one of the largest, privately held custom contract manufacturers in the plastics industry. Founded in 1967, The Tech Group has achieved over 30 years of consecutive sales growth. It strategically supports many Fortune 500 companies.
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