Filed by Cantel Medical Corp.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Minntech Corporation
Commission File Number: 000-11278
THE FOLLOWING TEXT IS OF A PRESS RELEASE ISSUED BY CANTEL MEDICAL CORP. ON
MAY 31, 2001
CANTEL MEDICAL CORP.
150 CLOVE ROAD
LITTLE FALLS, NEW JERSEY 07424
(973) 890-7220
FOR IMMEDIATE RELEASE
- ---------------------
Contact: Richard E. Moyer
Cameron Associates, Inc.
Phone: 212-554-5466
richard@cameronassoc.com
------------------------
CANTEL MEDICAL TO ACQUIRE MINNTECH CORPORATION FOR $10.50 PER SHARE IN CASH
AND STOCK
LITTLE FALLS, NEW JERSEY AND MINNEAPOLIS, MINNESOTA (MAY 31, 2001) ...
CANTEL MEDICAL CORP. (NASDAQ NM:CNTL) AND MINNTECH CORPORATION (NASDAQ NM:MNTX),
today jointly announced that they have entered into a definitive merger
agreement under which Cantel will acquire Minntech. The acquisition is part of
Cantel's strategic plan to further solidify its position as a leader in
infection control and medical device reprocessing. Minntech is a leader in the
development, manufacturing, and marketing of disinfection/reprocessing systems
for renal dialysis as well as filtration and separation and other products for
medical and non-medical applications. The transaction, valued at approximately
$70 million, will produce a combined company with approximately $125 million in
revenues for the twelve months ended April 30, 2001 and is expected to be
immediately accretive on a diluted EPS basis. The Boards of Directors of both
companies have approved the transaction, which is expected to close during the
third quarter of calendar 2001. Cantel has indicated that it plans to retain
Minntech's operations in Minneapolis, MN.
Under the terms of the definitive merger agreement, each share of Minntech
will be converted into the right to receive $10.50, consisting of $6.25 in cash,
and a fraction of a share of common stock of Cantel having a value of $4.25
(based on the average closing price of Cantel stock during a defined period
ending shortly before the merger). If, for example, the average closing price of
Cantel
stock during such period is $23.00 (yesterday's closing price), the fractional
share (or "exchange ratio") will be .1848. The exchange ratio will be adjusted
upward or downward to provide a value of $4.25, but will not be less than .1471
(the ratio if the average closing price during the period is $28.89 or greater)
nor more than .2833 (the ratio if the average closing price is $15.00 or less).
Commenting on the transaction, Mr. Charles M. Diker, Chairman of Cantel,
stated "The Minntech acquisition will launch Cantel to another level in
leveraging its consistent track record of leadership, expertise and operating
performance in the growing area of infection control and medical device
reprocessing. Minntech's current business enjoys significant expansion
potential, which our management team will aggressively pursue."
Mr. James P. Reilly, President and Chief Executive Officer of Cantel,
noted, "Minntech enjoys a robust technology platform that will enable Cantel to
address a broader range of infection control needs as well as to develop a host
of new products for other medical and industrial filtration uses. The Minntech
acquisition opens new growth markets to us and presents a compelling opportunity
to further utilize our management, research and development and manufacturing
capabilities."
Cantel has agreed to nominate Dr. Fred L. Shapiro, a nationally recognized
nephrologist and co-founder and current Board member of Minntech, to the Board
of Directors of Cantel following the merger. Dr. Shapiro stated, "This
transaction enables our shareholders to receive both cash and a significant
equity interest in the combined company, which I believe has substantial growth
potential. We believe that the quality of Cantel's management, its existing
operations in the Minneapolis area and its intent to continue to expand the
business activities in which Minntech is currently involved makes this a very
exciting combination."
Utilizing its proprietary core technologies in chemicals, hollow fibers,
and electronics, Minntech has developed and currently markets a wide variety of
medical device reprocessing and fluid filtration and separation products for the
renal dialysis, medical device disinfection, cardiosurgery, pharmaceutical,
biotechnology and semiconductor industries. Minntech is a world leader in renal
dialyzer reprocessing, providing a broad product line that includes a
reprocessing system and a sterilant that each command the largest market share
in the U.S. in their respective categories. Over the years, Minntech has
developed over 155 patented medical technologies, with 87 patent applications
pending.
Cantel has received a commitment, subject to certain conditions, from
Fleet Bank, N.A., to provide a new credit facility to finance the cash portion
of the consideration to be paid in the merger. With respect to the stock portion
of consideration, the number of shares to be issued by Cantel will range from
approximately 967,000 to 1,863,000 shares, depending on Cantel's average closing
stock price during the specified period preceding the merger. The transaction
will be taxable and will be accounted for as a purchase.
The transaction is subject to customary closing conditions, including the
approval of the
shareholders of each of Minntech and Cantel. Under the merger agreement,
Minntech has the right to terminate the agreement if Cantel's average closing
stock price during a defined period ending shortly before the merger is below
$13.24, unless Cantel elects to provide to Minntech shareholders additional
consideration, in cash or Cantel shares, at Cantel's option, such that the total
consideration is no less than $10.00 for each Minntech share.
In connection with the execution of the merger agreement, certain
stockholders of Cantel, who are the beneficial owners of, in the aggregate,
approximately 37.6% of the outstanding shares of Cantel common stock, have
entered into a Voting Agreement, dated May 30, 2001, pursuant to which, among
other things, each such stockholder has agreed (and has granted a proxy) to vote
its shares of Cantel common stock in favor of the issuance of Cantel common
stock in the merger.
Nexus Health Capital, LLC has acted as financial advisor to Cantel,
Dresdner Kleinwort Wasserstein rendered a fairness opinion, and Fried, Frank,
Harris, Shriver & Jacobson provided legal counsel. U.S. Bancorp Piper
Jaffray Inc. has acted as financial advisor to Minntech and rendered a
fairness opinion, and Faegre & Benson LLP provided legal counsel.
Cantel will hold a conference call today at 2:30 p.m. EST. To participate
in the conference call, dial 1-888-855-5428 approximately 5 to 10 minutes before
the beginning of the call. If you are unable to participate, a digital replay of
the call will be available from 8 a.m. EST on June 4, 2001 until 11:59 p.m. EST
on June 8, 2001 by dialing 1-888-203-1112 and using confirmation #467687. The
call will be simultaneously broadcast live over the Internet on vcall.com at
HTTP://WWW.VCALL.COM/NASAPP/VCALL/EVENTPAGE?ID=69040. A replay of the webcast
will be available on Vcall for 30 days beginning June 4, 2001.
Cantel Medical Corp. is a healthcare company concentrating primarily in
infection prevention and control products and diagnostic and therapeutic medical
equipment. Through its United States subsidiary, MediVators, Inc., Cantel serves
customers worldwide by designing, developing, manufacturing, marketing and
distributing innovative products for the infection prevention and control
industry. Through its Canadian subsidiary, Carsen Group Inc., Cantel markets and
distributes medical equipment (including flexible and rigid endoscopes),
precision instruments (including microscopes and high performance image analysis
hardware and software) and industrial equipment (including remote visual
inspection devices). Cantel's subsidiaries also provide technical maintenance
services for their own products, as well as for certain competitors' products.
IMPORTANT INFORMATION: Investors are urged to read the proxy
statement/prospectus when it becomes available, and any other relevant documents
filed with the SEC as they will contain important details on the proposed
acquisition. (Investors can access documents filed with the SEC for free at the
SEC's web site WWW.SEC.GOV.)
Cantel and Minntech, and their respective directors and executive officers, may
be deemed to be participants in the solicitation of proxies from the
stockholders of Cantel and Minntech in connection with the merger. Information
about the directors and executive officers of Cantel and
their ownership of Cantel stock is set forth in Cantel's Annual Report on Form
10-K for the fiscal year ended July 31, 2000. Information about the directors
and executive officers of Minntech and their ownership of Minntech stock is set
forth in the proxy statement for Minntech's 2000 annual meeting of stockholders.
Investors may obtain additional information regarding the interests of such
participants by reading the definitive joint proxy statement/prospectus when it
becomes available.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS. SUCH
STATEMENTS ARE ONLY PREDICTIONS, AND ACTUAL EVENTS OR RESULTS MAY
DIFFER MATERIALLY FROM THOSE PROJECTED. ALL FORWARD-LOOKING
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, INCLUDING THE RISKS
DETAILED IN CANTEL'S AND MINNTECH'S REPORTS AND STATEMENTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION.
--------------------