| Sulzer Medica Ltd. | |||
| Ticker: | SM | Zuercherstrasse 9 | |
| Exchange: | New York Stock Exchange | Winterthur, SWITZ 8401 | |
| Industry: | Manufacturing (SIC Code 3842) | ||
| Type of Shares: | American Depositary Receipts | Filing Date: | 6/13/97 | |
| U.S. Shares: | 5,808,590 | Offer Date: | 7/14/97 | |
| Non-U.S. Shares: | 17,191,410 | Filing Range: | $20.86 - $24.33 | |
| Primary Shares: | 23,000,000 | Offer Price: | $23.85 | |
| Secondary Shares: | 0 | Gross Spread: | $1.22 | |
| Offering Amount: | $519,685,028 | Selling: | $0.73 | |
| Expenses: | $17,000,000 | Reallowance: | ||
| Shares Out After: | - | |||
| Spin out parent firm: | Sulzer AG | |||
| Manager | Tier | Phone |
| Morgan Stanley Dean Witter Discover & Co. | Lead Manager | |
| SBC Warburg & Company | Co-manager | (212) 224-7274 |
| Issuer's Law Firm: | Shearman & Sterling |
| Bank's Law Firm: | Davis, Polk & Wardwell |
| Auditor: | Price Waterhouse |
| Registrar/Transfer Agent: | Citibank, NY |
Dollar amounts in U.S. millions except for per share data | |||||
| 3 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 3/31/97 | 3/31/97 | |||
| Revenue: | $803.00 | $240.00 | Assets: | $1,005.00 | |
| Net Income: | $52.00 | $21.00 | Curr Assets: | ||
| EPS: | $0.70 | $0.29 | Liabilities: | $1,055.00 | |
| Prior EPS: | Curr Liabilities: | ||||
| Cash Flow/Oper: | $8.00 | Equity: | -$50.00 | ||
| Cash Flow/Fin: | $28.00 | Cash: | $92.00 | ||
| Cash Flow/Inv: | -$51.00 | ||||
| Business Description |
| The company, a Swiss company, is one of the world's leading medical technology companies serving the orthopedic and cardiovascular markets on a global basis. With a rich history of technological leadership and major operations in Europe and the United States, the company holds prominent market positions in its principal areas of activity. The company designs, manufactures and markets a broad range of orthopedic and cardiovascular products, with a focus on implantable medical products and materials technology. In 1996, approximately 52% of the company's sales were of orthopedic products, offered through three operating companies which comprise the Orthopedics Division: Sulzer Orthopedics Ltd, based in Switzerland; Sulzer Orthopedics Inc., based in the United States; and Sulzer Calcitek Inc., based in the United States, Sulzer Orthopedics Ltd and Sulzer Orthopedics Inc. primarily cater to the reconstructive segment of the orthopedic market with broad product lines of major implant systems for hips and knees, and further product offerings for shoulders, elbows, wrists and ligaments. Sulzer Calcitek Inc. manufactures advanced dental and oral rehabilitation products. |
| Competition |
| The orthopedic products industry is highly competitive and has been characterized by technological change and incremental advancement. The company believes that its substantial operations in both Europe and the United States, its extensive reconstructive orthopedic product offerings including implants both with long-term track records and the newest technology and its designs to satisfy both of its major geographic markets benefit its competitive position. The company believes that this dual nature provides it with a "home court" presence in both the European and U.S. markets. In addition, this duality has helped the company to achieve market share in Europe, utilizing its European designs for hips and both European and U.S. designs for knees. Competition within the orthopedic implant industry is based primarily on value, price, breadth of product offerings, product design and performance, ease of use, peer influence among surgeons, relationships based upon high levels of customer service and results of the product over time. In recent years, the managed care environment in the United States and the maturing nature of the industry have made price and value increasingly important competitive factors. Price is a particularly relevant factor in the sale of those products where differentiation of the product cannot be clearly proven and the decision to buy is significantly influenced by persons other than the surgeon. Additionally, as health care providers become more cost-conscious, the use of higher-priced products has become increasingly limited to younger, more active patients. The company believes that its future success depends upon providing high quality service to all customers, offering a wide range of quality products at different pricing points, continuing to promote its key products, pursuing additional strategic agreements with buying groups, offering a wide array of ancillary products utilized by the orthopedic community and continuing to pursue, through research and development efforts, new products and services that can set the company apart from its competitors. |
| Business Plan |
| In addition to its overall strategy, the company's strategy for its Orthopedics Division is designed to serve the needs of the company's medical and economic customers. The principal elements of this strategy are outlined below: (I) Maintain Track Record of Breakthrough Innovations and Close Relationships with Designing Surgeons, (ii) Continue to Broaden Product Portfolio and Pursue Complementary Expansion, (iii) Maintain and Enhance Strategic Activity/Acquisition Activity, (iv) Implement Further Efficiency Improvements and Cost Savings, (v) Continue to Strengthen Relationships with Large Buying Groups, (vi) Continue Expansion in New and Emerging Markets and (vii) Compile and Use Clinical Outcomes to Support Product Efficacy. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used in support of its pursuit of external growth opportunities, including acquisitions, joint ventures, strategic alliances and research and development collaborations, for general corporate purposes including the repayment of outstanding debt, construction and improvement of facilities, the purchase of machinery or equipment or for working capital. |
| Name of Shareholder | % Owned Before | % Owned After |
| Sulzer AG | 76.20% |
| Officer Name | Title | Age |
| Fritz Fahrni | Chairman of the Board of Directors | 54 |
| Josef Ruegg | Chief Financial Officer and Group Vice President, Sulzer Medica | 56 |
| Lawrence H. Panitz | Group Vice President and General Counsel, Sulzer Medica USA Inc | 56 |
| Robert Cohen | Group Vice President Business Development, Sulzer Medica USA Inc. | 39 |
| T.C. Selman II | Group Vice President Human Resources and Facilities, Sulzer Medica USA Inc. | 47 |
| Roshan Maini | Managing Director, Sulzer Vascutek Ltd | 48 |
| Andre P. Buchel | President and Chief Executive Officer, Sulzer Medica | 58 |
| Terry L. Marlatt | President, Cardiovascular Protheses Division of Sulzer Medica and Sulzer Carbomedics Inc. | 52 |
| John E. Garcia | President, Electrophysiology Division of Sulzer Medica and Sulzer Intermedics Inc. | 50 |
| Felix Scherrer | President, Orthopedics Division of Sulzer Medica and Sulzer Orthopedics Ltd | 43 |
| Steven E. Hanson | President, Sulzer Calcitek Inc. | 44 |
| Jerry L. Marlar | President, Sulzer Orthopedics Inc. | 52 |