Mike Barbella03.15.12
Span-America Medical Systems Inc. has acquired virtually all the assets of privately held M.C. Healthcare Products Inc. The company expects the acquisition to be accretive to its earnings in fiscal 2012.
Beamsville, Ontario, Canada-based M.C. Healthcare Products makes and sells medical bed frames and related products for the long term care market.
Detailing the terms, Span-America said it paid $8 million (Canadian dollars) cash plus 100,000 shares of Span-America common stock for the substantial assets it acquired. The purchase price is subject to certain working capital adjustments.
Span-America will fund the acquisition through a combination of cash on hand and proceeds from a renewal of its $10 million revolving credit facility. The company said transaction is expected to result in goodwill of about $6.5 million in Canadian dollars.
Span-America said it will operate the acquired company under the registered business name M.C. Healthcare Products, a division of Span Medical Products Canada Inc., which is a newly formed British Columbia corporation and wholly-owned subsidiary of Span-America Medical Systems Inc. Span-America will operate the business from M.C. Healthcare's 50,000 square-foot manufacturing and showroom facility in Beamsville under a five-year lease agreement with an option to buy or continue the lease at the end of the term.
Span-America CEO Jim Ferguson said the acquisition will expand the company's market potential by bundling a robust line of medical bed frames with Span-America's broad line of branded therapeutic support surfaces. "We are excited about combining M.C. Healthcare with Span-America to leverage our product solutions and marketing opportunities in the long-term care market," he said in a news release. "M.C. Healthcare's product line fits very well within our current medical business. We already sell to many of the same customers, attend the same trade shows and have similar sales and marketing efforts."
M.C. Healthcare Products has 54 employees and 17 independent manufacturer's representatives. M.C. Healthcare Products reported sales of $12.2 million (Canadian dollors) and operating profit of $170,000 for the fiscal year ended July 31, 2011.
Span-America said the assets purchased consist primarily of accounts receivable, inventory, manufacturing equipment and intellectual property. Liabilities assumed consist primarily of ordinary course accounts payable and accruals.
Beamsville, Ontario, Canada-based M.C. Healthcare Products makes and sells medical bed frames and related products for the long term care market.
Detailing the terms, Span-America said it paid $8 million (Canadian dollars) cash plus 100,000 shares of Span-America common stock for the substantial assets it acquired. The purchase price is subject to certain working capital adjustments.
Span-America will fund the acquisition through a combination of cash on hand and proceeds from a renewal of its $10 million revolving credit facility. The company said transaction is expected to result in goodwill of about $6.5 million in Canadian dollars.
Span-America said it will operate the acquired company under the registered business name M.C. Healthcare Products, a division of Span Medical Products Canada Inc., which is a newly formed British Columbia corporation and wholly-owned subsidiary of Span-America Medical Systems Inc. Span-America will operate the business from M.C. Healthcare's 50,000 square-foot manufacturing and showroom facility in Beamsville under a five-year lease agreement with an option to buy or continue the lease at the end of the term.
Span-America CEO Jim Ferguson said the acquisition will expand the company's market potential by bundling a robust line of medical bed frames with Span-America's broad line of branded therapeutic support surfaces. "We are excited about combining M.C. Healthcare with Span-America to leverage our product solutions and marketing opportunities in the long-term care market," he said in a news release. "M.C. Healthcare's product line fits very well within our current medical business. We already sell to many of the same customers, attend the same trade shows and have similar sales and marketing efforts."
M.C. Healthcare Products has 54 employees and 17 independent manufacturer's representatives. M.C. Healthcare Products reported sales of $12.2 million (Canadian dollors) and operating profit of $170,000 for the fiscal year ended July 31, 2011.
Span-America said the assets purchased consist primarily of accounts receivable, inventory, manufacturing equipment and intellectual property. Liabilities assumed consist primarily of ordinary course accounts payable and accruals.