DALLAS (TheStreet) -- Kimberly-Clark (KMB) agreed to purchase medical-device maker I-Flow (IFLO) in a deal valued at about $276 million, a move that Kimberly-Clark said would give its health-care division a portfolio of higher-margin products.
The maker of Huggies diapers and Kleenex tissue will buy all of I-Flow's outstanding stock for $12.65 a share (or $324 million in cash), an 8% premium to I-Flow's closing price of $11.76 on Thursday. The $276 million deal value excludes acquired cash and cash equivalents.
In morning trading Friday, I-Flow shares traded up to the tender-offer price on heavy volume.
The deal is expected to close in the fourth quarter and to modestly dilute Kimberly-Clark's earnings in 2009 and 2010. But it should begin to add to the bottom line in 2011, the company said.The move will increase Kimberly-Clark's medical-device sales by more than 50%, the company added. I-Flow's flagship product is a kind of pump that injects local anesthetic near a patient's area of surgery. The Lake Forest, Calif., company has trailing 12-month revenue of about $137 million. Earlier in the week, Kimberly-Clark purchased Baylis Medical's pain- management business for an undisclosed amount. --Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV