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|Medtronic Makes Strategic Investment in LifeTech Scientific Corporation|
Strategic Alliance to Leverage Best of Both Companies to Reach Cardiovascular Patients in China and other Emerging Markets
MINNEAPOLIS and Shenzhen – October 15, 2012 – Medtronic, Inc. (NYSE:MDT) (“Medtronic”) and LifeTech Scientific Corporation (8122:HK) (“LifeTech”) today announced that they have entered into a strategic alliance that brings together the resources and technologies of the world’s largest medical device company with the local market expertise, brand recognition and growth potential of a recognized leader in China, which is fast becoming one of the world's largest device markets. The strategic alliance will allow each company to serve cardiovascular patients and clinicians who have been previously unreachable by either company alone and to develop a more robust cardiovascular platform.
Under the terms of the definitive agreements, Medtronic will purchase a 19.0 percent equity interest in LifeTech, and will receive the right to distribute current and future LifeTech products as well as the opportunity to acquire additional ownership upon the achievement of certain financial or development milestones. Medtronic will also provide services and expertise to LifeTech to support its continued growth, development pipeline and manufacturing capabilities to better serve patients and clinicians in China and globally.
“China is key to our global strategy as we continue to expand our geographic footprint and strive to meet the needs of local cardiovascular patients, and this agreement reaffirms our commitment to this important market,” said Mike Coyle, executive vice president and president of the Cardiac and Vascular Group at Medtronic.
“LifeTech is a proven leader in the cardiovascular segment in China, with a diverse portfolio of products to treat a multitude of cardiovascular diseases, including structural heart defects, peripheral and aortic vascular disease, and heart valve disease. As such, it is an ideal strategic partner for the Cardiac and Vascular Group at Medtronic. With core competencies in materials research and manufacturing and a demonstrated track record of being awarded important state research grants and tenders, this relationship with LifeTech provides an opportunity to accelerate Medtronic’s access and competencies in China, so that together we may reach more patients.” Coyle concluded.
“As the world’s largest medical device maker, an alliance with Medtronic provides LifeTech with access to world-class expertise and leading-edge technologies, and allows us to expedite bringing those technologies to patients who need them in China and global markets,” said Mr. Zhao Yiwei (Michael Zhao), Executive Director and Chief Executive Officer of LifeTech. “Together, we are committed to delivering quality products to new patients and new markets that neither company can reach today separately, and to provide enhanced value to physicians, patients and employees.”
Medtronic will purchase its initial equity investment for approximately HK$3.80 per share (US$46.6 million). Medtronic will also purchase a US$19.6 million convertible note representing an additional 7.4 percent equity on a fully-diluted post-conversion basis. Medtronic will also have the opportunity to acquire additional convertible notes upon the achievement of certain revenue or development milestones. The investment is consistent with Medtronic's capital allocation strategy and meets internal financial return expectations.
The transaction is expected to close within the next 60-90 days following the receipt of requisite approvals from the shareholders of LifeTech and applicable Chinese and Hong Kong regulatory authorities.
In collaborating with leading clinicians, researchers and scientists, Medtronic offers the broadest range of innovative medical technology for the interventional and surgical treatment of cardiovascular disease and cardiac arrhythmias. The company is continuing its commitment to offering products and services that deliver clinical and economic value to healthcare consumers and providers worldwide.
Any forward-looking statements are subject to risks and uncertainties such as those described in Medtronic’s periodic reports on file with the Securities and Exchange Commission. Actual results may differ materially from anticipated results.
-end-Medtronic Media Contacts:
Christopher Garland, CRDM Public Relations, 763-526-1621
Jeff Warren, Investor Relations, 763-505-2696