Synergy Health H1 Revenues Rise, To Be Bought By Steris For $1.9 Bln; Stock Up

(RTTNews) - Shares of Synergy Health Plc (SYR.L) climbed around 32 percent in the morning trading in London after the ambulance & Emergency Services agreed to be acquired by US-based Steris Corp. (STE) in about 1.2 billion pounds or $1.9 billion cash and stock deal. Synergy also announced that its first-half revenues increased and performance is in line with the Board's expectations, as a result of positive progress with the implementation of its strategy.

In its statement, Steris said it has reached agreement on the terms of a recommended combination, under which Synergy Shareholders will receive 439 pence in cash and 0.4308 New Steris Shares for each Synergy Share. The terms of the combination represents a value of 19.50 pounds per Synergy Share based on Steris' closing share price of $56.38 on the Latest Practicable Date.

The per share price represents a premium of 39 percent to the closing price of £14.00 per Synergy Share on the Latest Practicable Date, and a premium of 32 percent to the volume weighted average closing price over the 30 day trading period.

The Synergy Directors consider the terms of the deal to be fair and reasonable, and accordingly, unanimously intend to recommend that Synergy Shareholders vote in favour of the deal.

Steris said it does not expect the combination to have an impact on its adjusted earnings per diluted share until completion of the combination, which is anticipated to take place by March 31, 2015. Steris expects the combination will be significantly accretive to New STERIS's adjusted net income per diluted share beginning in fiscal year 2016.

In order to undertake the combination, Steris has incorporated a new company, New STERIS. Following completion of the Combination, New Steris will become the holding company of Synergy and Steris.

Following the deal closure, Synergy Shareholders would hold New STERIS Shares representing approximately 30 percent of the issued share capital of New STERIS. STERIS Stockholders are expected to hold New STERIS Shares representing approximately 70 percent.

New STERIS is expected to have a combined revenue of approximately $2.6 billion and employ approximately 14,000 people throughout its operations in over 60 countries around the world.

In its trading update for the six months ended September 28, Synergy said its underlying revenues grew 7.4 percent on a constant currency basis to 206.4 million pounds, with a 17.5 percent climb in Applied Sterilisation Technologies.

Reported revenues were 197.6 million pounds, 2.8 percent higher than last year's 192.1 million pounds, despite adverse currency translation effects. Hospital Sterilisation Services' revenues grew 5.8 percent, while that of healthcare solutions dropped 2.1 percent.

In London, Synergy shares were gaining 446 pence or 31.86 percent, and trading at 1,846 pence.

Steris shares closed Friday's trading at $56.38, down $1.12 or 1.95 percent.