SC TO-C
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
(RULE 14d-100)
Tender Offer Statement under Section 14(d)(1) or Section 13(e)(1) of the Securities Exchange Act of
1934
RESPIRONICS, INC.
(Name of Subject Company (Issuer))
MOONLIGHT MERGER SUB, INC.
a wholly owned subsidiary of
PHILIPS HOLDING USA INC.
a wholly owned subsidiary of
KONINKLIJKE PHILIPS ELECTRONICS N.V.
(Names of Filing Persons (Offerors))
Common Stock, par value $0.01 per share,
and associated common stock acquisition rights
(Title of Class of Securities)
761230101
(CUSIP Number of Class of Securities)
Joseph E. Innamorati
Moonlight Merger Sub, Inc.
1251 Avenue of the Americas
New York, NY 10020-1104
(212) 536-0641
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of filing persons)
with copies to:
Neil T. Anderson
Matthew G. Hurd
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
(212) 558-4000
CALCULATION OF FILING FEE
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Transaction Valuation |
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A filing fee is not required in connection with this filing as it relates solely to preliminary communications made before
the commencement of a tender offer. |
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Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with
which the offsetting fee was previously paid. |
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Identify the previous filing by registration statement number or the Form or Schedule and the date of its
filing. |
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Amount Previously Paid:
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Date Filed:
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Check the box if the filing relates solely to preliminary communications made before the commencement of a
tender offer. |
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Check the appropriate boxes below to designate any transactions to which the statement relates:
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third-party tender offer subject to Rule 14d-1. |
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issuer tender offer subject to Rule 13e-4. |
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going-private transaction subject to Rule 13e-3. |
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amendment to Schedule 13D under Rule 13d-2. |
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Check the following box if the filing is a final amendment reporting the results of the tender offer: o |
THE FOLLOWING PRESS RELEASE WAS ISSUED ON DECEMBER 21, 2007.
PHILIPS TO MAKE A PUBLIC OFFER FOR ALL SHARES OF U.S.-BASED RESPIRONICS; A MAJOR STEP FORWARD FOR
PHILIPS HEALTHCARE
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Philips and Respironics agree to all-cash offer of USD 66 per share; total transaction
price of approximately EUR 3.6 billion |
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Acquisition significantly strengthens Philips Healthcare, will provide a strategic
platform for further growth and leverages the acquisitions of Lifeline and Raytel |
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Acquisition will make Philips a leader in the global Home Healthcare space and in the
fast-growing field of obstructive sleep apnea management and home respiratory care |
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Philips in-hospital position also strengthened through acquisition given
Respironics strong non-invasive ventilation and respiratory monitoring products for
hospitals and clinics |
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Respironics Board of Directors recommends offer to shareholders |
Amsterdam, the Netherlands and Murrysville, Pennsylvania, USA Royal Philips Electronics (AEX:
PHI, NYSE: PHG) (Philips) and Respironics, Inc (Nasdaq: RESP) today announced a definitive merger
agreement pursuant to which Philips will commence a tender offer to acquire all of the outstanding
shares of Respironics for USD 66 per share, or a total purchase price of approximately EUR 3.6
billion (USD 5.1 billion) to be paid in cash upon completion. This transaction will firmly place
Philips as a global leader in the fast-growing home healthcare market by adding new product
categories in obstructive sleep apnea and home respiratory care to its existing businesses in this
field. In addition, this acquisition will be highly complementary to Philips patient monitoring
businesses in the hospital setting. The board of directors of Respironics has unanimously approved
the transaction and recommends the offer to their shareholders.
Respironics, based in Murrysville, Pennsylvania, USA, is the leading provider of innovative
solutions for the global sleep therapy and respiratory markets. The fast-growing company develops,
manufactures, distributes and markets innovative products in the field of respiratory medical
technology, which are used in both home settings as well as in hospitals and clinics. Respironics
has approximately 5,300 employees worldwide.
Respironics is an excellent strategic fit and will significantly drive our growth in healthcare
both in the hospital and in the home, said Gerard Kleisterlee, President and Chief Executive
Officer of Royal Philips Electronics. The acquisition of Respironics is another major milestone
towards the completion of our objective to build market leadership positions in high-growth,
high-margin businesses across the three market sectors of healthcare, lighting and consumer
lifestyle. It is also another significant step in our continuing capital re-allocation process.
With about EUR 10 billion worth of closed or announced acquisitions since 2005 and EUR 10.2 billion
of realized or announced share repurchase programs during the same period, we are well on track to
deliver an efficient balance sheet before the end of 2009.
Almost three-quarters of Respironics sales are achieved in the companys Sleep and Home
Respiratory business which consists of diagnostic and therapeutic devices for sleep disordered
breathing and chronic respiratory diseases. Respironics is a global leader in the treatment of
Obstructive Sleep Apnea (OSA), a condition characterized by the repeated cessation of breathing
during sleep. It is estimated that in the United States alone there are 18 20 million sufferers
of moderate or severe OSA of which only 15 20% have been diagnosed. Research in recent years has
shown a link between OSA, heart disease, stroke and diabetes. Additionally, the company has a
leading position in noninvasive ventilation and has recently introduced new home oxygen
technologies to serve the needs of respiratory impaired patients in the home. The remainder of the
Companys business is focused on the hospital channel and includes noninvasive and invasive
ventilation, respiratory monitoring, neonatal products and respiratory drug delivery technologies
for the treatment of respiratory diseases.
Growth in the USD 5 billion plus global respiratory markets is expected to be at least 10% per
annum going forward and the market for global sleep apnea management in particular is expected to
show a mid-teen percentage growth rate annually in the coming years, as rising awareness of this
potentially life-threatening condition leads to increasing diagnosis and treatment of OSA. Growth
in the global sleep and respiratory markets is expected to be
particularly significant in Asia and Europe, where Philips strong brand combined with the sales
and distribution channels of both organizations will further accelerate adoption of Respironics
innovative portfolio.
A core part of Philips healthcare strategy is to take a leading position in the high-growth
sector of home healthcare, Steve Rusckowski, Chief Executive Officer of Philips Healthcare and
member of the Board of Management of Royal Philips, said. This acquisition, with its significant
strategic and financial benefits to Philips Healthcare, is another important step in carrying out
this strategy. Upon completion of this acquisition, Respironics will become the centerpiece of
Home Healthcare Solutions, which will form part of Philips Healthcare as of January 1, 2008.
The transaction we are announcing today will deliver superior and certain value to Respironics
shareholders, said John L. Miclot, President and Chief Executive Officer of Respironics. The
combination of Respironics and Philips will allow us to continue to provide exceptional products
and services to our customers and allow Respironics to expand its leadership in the global sleep
and respiratory markets. Philips is the right partner to create additional growth opportunities for
our company, and we believe that our company will benefit significantly by being part of a larger,
growing and dynamic organization. We look forward to working with Philips to ensure an effective
and seamless transition.
Philips has made a number of successful acquisitions in the area of Home Healthcare so far. Last
year Philips announced the acquisition of Lifeline Systems, and Health Watch and Raytel Cardiac
Services were added this year. Philips Home Healthcare Solutions already offers a range of
solutions that enable the treatment and monitoring of patients in the surroundings of their
personal living space rather than in a hospital environment. Today, Philips Home Healthcare
Solutions supports almost one million at-risk seniors, either in their own homes or in senior
living facilities throughout the U.S. and Canada.
Cost synergies expected from this transaction will be primarily based on supply chain optimization
and savings in general and administrative expenses including IT related synergies to be achieved by
leveraging Respironics strong IT infrastructure. Respironics respiratory management portfolio is
synergistic with Philips current offerings in patient monitoring, from pre-hospital admission to
long-term disease management in the home. The combined businesses will profit from cross-selling
opportunities leveraging Philips existing strengths in both the hospital and the home. The
transaction will be immediately accretive to revenue growth as well as EBITA margin to Philips and
Philips Healthcare.
Over a twelve month period ending in September 2007, Respironics reported sales of approximately
USD 1.2 billion with an EBITA margin of 19%. In its last five fiscal years Respironics has seen
revenues grow at a compound annual growth rate of 19% whilst the EBITA margin grew at a compound
annual growth rate of 20% over this period.
This transaction is structured as an all-cash tender offer by Philips for all of the issued and
outstanding shares of Respironics, to be followed by a merger in which each remaining un-tendered
share of Respironics will be converted into the USD 66 per share price paid in the tender offer.
The tender offer is expected to commence by January 8, 2008 and is not subject to any financing
contingency. The acquisition will be effected pursuant to a merger agreement and is subject to the
terms and conditions of that agreement. These include the tender of a majority of the outstanding
Respironics shares, as well as customary U.S. and EU regulatory clearances. The transaction is
expected to close in the first quarter of 2008 upon which Respironics will become the headquarters
for Philips Home Healthcare Solutions group within Philips Healthcare.
At 10.00 AM CET today, financial analysts are invited to join a telephone conference with Gerard
Kleisterlee, Philips President and CEO, Pierre-Jean Sivignon, Chief Financial Officer of Philips
and Steve Rusckowski, Chief Executive Officer of Philips Healthcare. A live webcast of this
conference call and a presentation with regard to this transaction will be made available on
Philips Investor Relations website at: http://www.philips.com/about/investor/index.page.
At 11.30 AM CET today, journalists are invited to join a telephone briefing with
Mr Kleisterlee, Mr Sivignon and Mr. Rusckowski. A live webcast of this briefing will be made
available on Philips News Center website at:
http://www.newscenter.philips.com/about/news/index.page
For further information, please contact:
Arent Jan Hesselink
Philips Corporate Communications
Tel: +31 20 59 77415
Email: arentjan.hesselink@philips.com
Andre Manning
Philips Healthcare Communications
Tel: +1 646 508 4545
Email: andre.manning@philips.com
Dan Bevevino
Vice President & CFO, Respironics
Tel: +1 724 387 5235
Maryellen Bizzack
Director, Marketing & Communications, Respironics
Tel: +1 724 387 5006
About Respironics
Respironics is a leading developer, manufacturer and distributor of innovative products and
programs that serve the global sleep and respiratory markets. Focusing on emerging market needs,
the Company is committed to providing valued solutions to help improve outcomes for patients,
clinicians and healthcare providers. Respironics markets its products in 141 countries and employs
over 5,300 associates worldwide. Further information can be found on the Companys Web site:
www.respironics.com.
Forward-looking statements
This release may contain certain forward-looking statements with respect to the financial
condition, results of operations and business of Philips and certain of the plans and objectives of
Philips with respect to these items, including without limitation completion of the tender offer
and merger and any expected benefits of the merger. Completion of the tender offer and merger are
subject to conditions, including satisfaction of a minimum tender condition and the need for
regulatory approvals, and there can be no assurance those conditions can be satisfied or that the
transactions described in this press release will be completed. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future and there are many factors that could cause actual results and
developments to differ materially from those expressed or implied by these forward-looking
statements.
Additional Information
The tender offer described in this press release has not yet commenced, and this press release is
neither an offer to purchase nor a solicitation of an offer to sell Respironicss common stock.
Investors and security holders are urged to read both the tender offer statement and the
solicitation/recommendation statement regarding the tender offer described in this press release
when they become available because they will contain important information. The tender offer
statement will be filed by Moonlight Merger Sub, Inc., a fully-owned subsidiary of Philips Holding
USA Inc., which is a fully-owned subsidiary of Royal Philips Electronics, with the Securities and
Exchange commission (SEC) and the solicitation/recommendation statement will be filed by
Respironics with the SEC. Investors and security holders may obtain a free copy of these statements
(when available) and other documents filed by Philips or Respironics with the SEC at the website
maintained by the SEC at www.sec.gov. The tender offer statement and related materials,
solicitation/recommendation statement, and such other documents may be obtained for free by
directing such requests to Investor Relations of Respironics at 1010 Murry Ridge Lane, Murrysville,
PA 15668.
For media inquiries, please contact:
Steve Kelly, Senior Public Relations Manager
Tel: +1 425-487-7479
E-mail: steve.kelly@philips.com
Ian Race, Public Relations Manager
Tel: +1 978-659-4624
E-mail: ian.race@philips.com
About Royal Philips Electronics
Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in
healthcare, lighting and consumer lifestyle, delivering people-centric, innovative products,
services and solutions through the brand promise of sense and simplicity. Headquartered in the
Netherlands, Philips employs approximately 128,100 employees in more than 60 countries worldwide.
With sales of USD 37 billion (EUR 27 billion) in 2006, the company is a market leader in medical
diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, as well as
lifestyle solutions for personal wellbeing. News from Philips is located at
www.philips.com/newscenter.