AMERICAN HOME PRODUCTS ACQUIRING CHESE-POND's HOSPITAL
AMERICAN HOME PRODUCTS ACQUIRING CHESE-POND's HOSPITAL products division for $260 mil., the companies announced Sept. 17. The 45-year-old Chese-Pond's subsidiary does $100 mil. in annual sales: major products include the Kangaroo enteral feeding system, Respiradyne pulmonary function tester, Thermazene prescription burn cream and Blister Film and Co-film sterile dressings. The Chese-Pond's hospital business should blend well with American Home Products' Sherwood Medical hospital supply business. Sherwood's largest products are the Monoject line of disposable needles and syringes and the Argyle line of tubes and catheters. Commenting on the definitive agreement, American Home Products Chairman John Culligan stated that "this acquisition is an excellent fit with our Sherwood Medical Division, a leading supplier of syringes, needles, catheters and other medical devices." Chese-Pond's hospital division's sales were $84.4 mil. in 1985 and are expected to reach $100 mil. this year, based on a five-year growth rate of over 15% per annum. Net income in 1985 was $10.1 mil. In an early June announcement that the business was up for sale, Chese-Pond's Chairman Ralph Ward said "the decision to sell the division is the result of the on-going evaluation of the long-term direction of Chesebrough's business. To this extent, today's hospital products category does not meet our objectives. Revenues from the sale will be used to strengthen, via acquisition and other means, the core businesses in our Consumer Products and Chemical Products groups." Funds from the divestiture also will be used to lower debt incurred with the February 1985 acquisition of Stauffer Chemicals for $1.3 bil. In its 1985 annual report, Chese-Pond's noted that it had reduced its debt to total capital ratio from 78% immediately after the acquisition to 60.2% by the end of the year and expected to reduce the ratio to below 50% by the end of 1986. Other Chese-Pond's hospital products being picked up by American Home Products are Ballo and Faichney thermometers, Filac electronic thermometers, Intersorb and Sta-tite dressings, Magnacal, Vitaneed, Propac, Sumacal and Microlipid feeding forumulas, Thora-Drain underwater chest-drainage systems, Triflo II and Voldyne deep-breathing exercisers, Uri-Drain male incontinence devices, Vaseline and Xeroform nonadhering dressings and the Vaseline Constant Care skin care system.
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