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Business Americas

CONMED and Viking Systems have entered into a definitive agreement. (Photo: Kuzma/Shutterstock)
Aug 15, 2012 | Business Americas

CONMED Corporation acquires Viking Systems

by Surgical Tribune

UTICA, N.Y., USA: CONMED Corporation, a medical technology company based in Utica, and Viking Systems, worldwide developer, manufacturer and marketer of 3-D and 2-D visualization solutions for complex minimally invasive surgery, have entered into a definitive agreement through which CONMED will acquire Viking for $0.27 per share in cash. CONMED intends to add the Viking line of 3-D high-definition surgical video products to its product portfolio.

The purchase price represents a 42 per cent premium over the closing price of Viking's common stock on Aug. 13, 2012, the companies stated in a press release. The total expected consideration, including amounts to be paid in respect of in-the-money stock options and warrants, will be approximately $22.5 million.

Under the terms of the transaction, a wholly owned subsidiary of CONMED will promptly commence a tender offer to purchase all of Viking's outstanding shares of common stock. Following successful completion of the tender offer, CONMED will acquire all remaining shares not tendered into the offer through a second-step merger at the same price as the tender offer.

"The Viking line of 3-D HD surgical video products represents a strategic addition to our general surgical imaging franchise," commented Joseph J. Corasanti, president and CEO of CONMED Corporation. "Viking is at the forefront of 3-D HD surgical imaging, and we believe that merging this technology with our established worldwide marketing and sales teams will expand the use of superior surgical visualization, benefiting both surgeons and their patients."

"This is a significant milestone for Viking," said Jed Kennedy, president and CEO of Viking. "We are excited to join together with CONMED, which shares our vision for 3-D HD surgical imaging and has an established reputation for innovation and excellent customer service. Viking's board of directors recommends that all stockholders tender all their shares into CONMED's offer."

Viking's lead product, the Viking 3DHD Vision System, is an advanced 3-D vision system that employs a flat-screen monitor and passive glasses. It is used by surgeons during complex, minimally invasive laparoscopic surgery, with applications in urological, gynecological, bariatric, cardiac, neurological and general surgery. Viking also manufactures 2-D digital cameras that are sold to third-party companies who sell to end users through original equipment manufacturer programs.

CONMED anticipates that its present 2-D surgical video research and marketing team in Santa Barbara, Calif., will be consolidated into the Viking group in Massachusetts over the next year. It is expected that the transaction will initially be neutral to adjusted earnings, although CONMED will incur transitional costs associated with the consolidation.

The proposed transaction has been approved by the boards of directors of both companies. In addition, certain Viking stockholders have entered into a tender and voting agreement under which they have agreed, among other things, to tender into the tender offer all shares of Viking's common stock that they beneficially own. As of Aug. 13, 2012, this tender and voting agreement represents commitments to tender an aggregate of approximately 43 percent of Viking's issued and outstanding shares.

Consummation of the tender offer is subject to various conditions, including a minimum tender of at least a majority of outstanding Viking shares on a fully diluted basis and other customary conditions. The tender offer is not subject to a financing condition. The tender offer is expected to be launched by approximately Aug. 27, 2012, and CONMED expects the transaction to close in the fourth quarter of 2012.

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