SAES Acquires Memry Corporation

Milan, Italy-based SAES has acquired Memry Corp. for $77.7 million or $2.51 per share. The price represents a premium of +/- 73% based on Memry’s closing price on June 23, 2008.

Memry develops nitinol-based and polymer-based medical device products, including its proprietary shape memory alloys. Medical device products include stent components, catheter components, guidewires, laparoscopic surgical sub-assemblies and orthopedic instruments as well as complex, multi-layer polymer extrusions used for guidewires, catheters, delivery systems and other interventional medical devices.

The predominant material utilized by the company is a nickel-titanium alloy commonly referred to as nitinol. Nitinol is capable of changing shape in response to thermal and mechanical changes (watch the video). The company added polymer-extrusion and polymer-based components to its product mix with the acquisition of Putnam Plastics in 2004.

In 2007, Memry reported revenues of $51.7 million, a gross margin of $16.6 million, an operating income equal to $1.3 million and net income of $0.3 million. The company has no debt. Headquartered in Connecticut and with two manufacturing facilities in Menlo Park, CA, Memry employs approximately 350 people.

SAES, best known for its vacuum systems including vacuum power tubes and thermal insulation, has a substantial investment in shape memory alloys and is seeking to expand its position in advanced materials. SAES has been operating in the U.S. market since the 1960’s.

Commenting on the deal, Massimo della Porta, CEO of SAES, said, “[Memry] will be an excellent complement to our traditional business, granting us the possibility of exploiting technical, scientific and operating synergies as well as leveraging our international network. This market shows significant growth rates in the U.S. and in the rest of the world, where the strong international network of SAES has been successfully competing for years.”

Approximately 40% of the acquisition will be funded through operating cash flow with the balance paid through loans. The merger plan was unanimously approved by the boards of both companies; the transaction is expected to close in September 2008.

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