Haemonetics Corp. (NYSE:HAE) plans to lay off about 170 workers and close facilities in Phoenix and Chicago as it integrates its new, $61 million acquisition, GlobalMed Technologies (OTC:GLOB).
The Braintree, Mass.-based blood management firm said the integration will cost about $15 million and save $14 million a year thereafter. CEO Brian Concannon and CFO Chris Lindop told analysts during a conference call that the layoffs will include employees from both companies. The move is also prompting Haemonetics to abandon development of its Symphony blood bank donation management software and its next generation of platelet apheresis products. Discontinuing development of the Symphony product, which the company said it will continue to support, means a $4 million non-cash write-off charge; abandoning the platelet apheresis operation will incur a $12 million write-down.
In early February, Haemonetics issued a $1.22-per-share offer, worth about $60 million and originally set to expire March 18, for GlobalMed. The offer was extended to give GlobalMed time to settle a lawsuit filed by shareholders alleging that GlobalMed’s managers breached their fiduciary duty by agreeing to a deal that undervalues the company. Haemonetics closed the tender offer April 1, after roughly 89.7 percent of the common stock had been tendered, or roughly 34.4 million shares. That installment cost about $58 million; the remainder will be acquired for about $3 million in a “short form” merger that doesn’t require the approval of GlobalMed’s remaining stockholders.
When the deal was announced Feb. 1, Haemonetics executives said it would significantly expand the company’s offerings for blood-collection centers and broaden its footprint in Europe and Asia. GlobalMed’s domestic operations include Wyndgate Technologies, supplying software products and services to donor centers and hospital transfusion services; eDonor, a web-based donor relationship management system; and PeopleMed, offering validation, consulting and compliance software. The company also operates an European subsidiary, Inlog SA, providing cellular therapy software in addition to donor center and transfusion management tools.
Lindop and Concannon said Haemonetics expects to log revenue growth of about 8 percent during fiscal 2010, with adjusted earnings per share of $2.83 to 2.85. For fiscal 2011, which begins July 1, the executives said the firm expects revenue growth of between 9 percent and 12 percent and adjusted EPS of $3.15 to $3.25.
Lindop said the FY2010 revenue forecast, which is on the low end of Haemonetics’ prior guidance, is largely due to a Japanese Red Cross decision to reduce the amount of blood collected via apheresis by about 20 percent. That means a roughly 2 percent hit for the company’s workhorse global plasma business. Concannon said he is "not disappointed" in posting high-single-digit revenue growth, given the global economic situation.
Haemonetics said its board of directors cleared a $50 million stock buyback program during fiscal 2011 and that it should have about $130 million in cash on hand after the GlobalMed deal closes.