ELAN's $ 25 MIL. PURCHASE OF KNIGHT MEDICAL
ELAN's $ 25 MIL. PURCHASE OF KNIGHT MEDICAL will expand the firm's enteral nutritional product line in the U.S. When finalized, the purchase will augment the U.S. sales organization and product line Elan acquired with the recent purchase of a major stake in Parsippany, N.J.-based O'Brian Pharmaceuticals. Headquartered in Cambridge, Mass., Knight Medical manufactures and markets through distributors a line of enteral nutritional products, with sales in 1988 expected to reach $ 10 mil. The letter-of-interest to acquire Knight Medical was announced Nov. 1. Elan has agreed to purchase all outstanding stock in Knight Medical for $ 14 mil., with an additional $ 11 mil. payment contingent on "certain performance goals" for 1988, 1989 and 1990. Elan will be more than doubling its volume with the acquisition. The Irish company's fiscal 1988 sales (year ended March 31) were $ 11.1 mil. As of March 31, Elan owned a 42% stake in O'Brien. Noting that both O'Brien and Knight Medical sell enteral nutritional products to hospital, nursing home and home health care markets, Elan chairman and CEO Donald Panoz commented in the release that "there are strong synergies between Knight Medical and O'Brien Pharmaceuticals, which has a sales force of 40 hospitals. This sales force, coupled with the strong distributor network of Knight Medical, will provide a complete enteral nutritional product line to its customers." Knight Medical was founded in 1985 by its current chairman and CEO, John Knight. The company had sales of $ 6.6 mil. in 1987 and a net income of $ 317,912. Elan's other recent moves into the U.S. health care market have included the establishment of a joint partnership with Connaught Labs for pediatric products. Under the agreement, which was announced in July, elan will develop and manufacture products while Connaught will handle marketing and selling.
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