This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Span-America Acquires M.C. Healthcare Products Inc.

Span-America Medical Systems, Inc. (NASDAQ: SPAN) announced today that it has acquired substantially all the assets of M.C. Healthcare Products Inc. (MCHP). MCHP, located in Beamsville, Ontario, Canada, is a privately-owned manufacturer and marketer of medical bed frames and related products for the long term care market.

“We are excited about combining M.C. Healthcare with Span-America to leverage our product solutions and marketing opportunities in the long term care market,” stated Jim Ferguson, president and chief executive officer of Span-America. Ferguson says the move will expand the company’s market potential by bundling a robust line of medical bed frames with Span-America’s broad line of branded therapeutic support surfaces. “M.C. Healthcare’s product line fits very well with our current medical business,” he said. “We already sell to many of the same customers, attend the same trade shows and have similar sales and marketing efforts.” The company expects the acquisition to be accretive to its earnings in fiscal 2012.

MCHP reported sales of CDN $12.2 million and operating profit of CDN $170,000, which includes non-recurring and owner-related expenses of CDN $1.5 million and CDN $84,000 in depreciation and amortization for the fiscal year ended July 31, 2011.

Under the terms of the transaction, Span-America acquired, through a wholly-owned subsidiary, substantially all of the assets of MCHP for CDN $8.0 million cash plus 100,000 shares of Span-America common stock. The purchase price is subject to certain working capital adjustments as set forth in the acquisition agreement. Span-America will fund the acquisition through a combination of cash on hand and proceeds from a renewal of its $10 million revolving credit facility that includes a temporary line-of-credit increase from $10 million to $13 million. The assets purchased consist primarily of accounts receivable, inventory, manufacturing equipment and intellectual property. Liabilities assumed consist primarily of ordinary course accounts payable and accruals. The transaction is expected to result in goodwill of approximately CDN $6.5 million.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs