Summary

Other Scenarios:

Buyer: Symmetry Medical Inc. (SMA) Last Price: 16.40 Market Cap.: 581.13M
Target: Penwest Pharmaceuticals (PPCO) Last Price: 8.55 Market Cap.: 200.03M

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
Healthcare 931
Biopharmaceuticals   377
Healthcare Services   153
Medical Devices   255
Outsourced Services 69
Industrial and Materials   878
Industrial Manufacturing   398

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Sample Products in Similar Lines of Business

Sample Products in Complementary Lines of Business
Buyer (Total: 8)
  • Symmetry Medical Total Solutions
  • Riley Medical Inc.
Target (Total: 12)
  • SyncroDose
  • Geminex
  • TIMERx
  • Gastroretentive Drug Delivery System
Buyer
  • Specialty Surgical Instruments , Inc.
  • Riley Medical Medical Instrument Containers
  • Ultra Containers Series
  • PolyVac
Target
  • Nifedipine XL
  • PW2132 (Torsemide ER)
  • PW4110
  • PW4153

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 0)

n/a
Target (Total: 2)
  • Mylan Inc. (MYL)
  • DRAXIS Health Inc. (USA) (DRAX)
Buyer (Total: 10)
  • Johnson & Johnson (JNJ)
  • Zimmer Holdings, Inc. (ZMH)
  • Medtronic, Inc. (MDT)
  • Stryker Corporation (SYK)
Target (Total: 4)
  • Mylan Inc. (MYL)
  • sanofi-aventis (ADR) (SNY)
  • Endo Pharmaceuticals (ENDP)
  • Merck KGaA

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 1,795 75
Revenue Per Employee 155,015.8 35,697.8
Total Revenue 69.6 0.7
Total Expenses 62.5 9.9
Other Revenue 0.0 0.0
Cost of Revenue 54.1 0.1
SG&A Expense 8.4 3.7
Research & Development 0.0 6.0
Other Operating Expense 0.0 0.0
Operating Income 7.1 -9.1
Unusual Income 0.0 0.0
LT Debt to Capital 18.1 25.18
Fwd P/E 24.48 -5.18
Fwd P/Rev 2.02 64.18
Book Value 303.5 32.1
Curr Portion of LTD/Cap Lease 11.2 1.2

Individual Company Summary

Focused

Buyer

Focused (): Healthcare > Outsourced Services > Development/Manufacturing Services > Contract Manufacturing Organizations (CMO) > Medical Devices

Target

Focused (): Healthcare > Outsourced Services > Drug Delivery Technology > Oral Delivery

Business Description

Buyer

Symmetry Medical Inc. (Symmetry) is an independent provider of implants and related instruments and cases to global orthopedic device manufacturers. Symmetry designs, develops and produces these products for companies in other segments of the medical device market, including the dental, osteobiologic and endoscopy segments, and it also provides limited specialized products and services to non-healthcare markets, such as the aerospace market. The Company?s primary products and services include implants, instruments, cases and other specialized products and services for non-healthcare markets, primarily the aerospace market. In April 2007, it acquired TNCO Inc., a specialty medical instrument company. On January 9, 2007, it subsidiary Thornton Precision Components Limited acquired Whedon Limited and the holding company of Clamonta Limited. In September 2007, the Company acquired Specialty Surgical Instruments (SSI) and Ultra Containers of America (UCA).

Target

Penwest Pharmaceuticals Co. (Penwest) develops pharmaceutical products based on drug delivery technologies with a focus on products that address disorders of the nervous system. In June 2006, the United States Food and Drug Administration (FDA), approved for marketing Opana ER, an extended release formulation of oxymorphone hydrochloride that the Company developed with Endo Pharmaceuticals Inc (Endo), using its TIMERx drug delivery technology. Penwest is also developing product candidates designed for the treatment of pain, epilepsy, Parkinson?s disease and spasticity, as well as a product candidate for the treatment of edema resulting from congestive heart failure. The Company conducts its business primarily in North America.

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 22.75 85.73
Operating Margin % 10.75 -1,171.13
Quick Ratio 1.32 6.99
Current Ratio 2.51 7.23
Coverage Ratio -0.22 -0.05
Total Assets 431.8 51.4
Return on Equity % 5.35 -104.45
Return on Assets % 3.76 -65.22
Cash+ ST Inv. Per Share 0.31 1.62
Total Debt 79.3 12.0
Total Debt to Equity % 26.13 37.41
Total Debt to Tangible Equity % 75.49 41.44
Debt to Asset % 18.37 23.36

Product Summary

Sector Buyer Target
Healthcare
Biopharmaceuticals  
Cardiovascular System
The Cardiovascular System Subsector includes therapeutics that treat disorders affecting the heart and blood vessels.
  
Neurology
The Neurology Subsector includes therapeutics that treat disorders of the central nervous system, including the brain, spinal cord, and nerves.
  
Pain Management
The Pain Management Subsector includes therapeutics that treat and management pain.
  
Healthcare Services  
Distributors
The Distributors Subsector is comprised of companies that distribute a wide variety of healthcare products, equipment and supplies to healthcare service providers and institutions.
  
Medical Devices  
Medical Supplies
The Medical Supplies Subsector includes basic and consumable products that are widely used in healthcare settings.
  
Outsourced Services
Development/Manufacturing Services
The Development/Manufacturing Services Subsector includes companies that provide research, development, manufacturing, sales and marketing to biopharmaceutical and medical device companies.
  
Drug Delivery Technology
The Drug Delivery Technology Subsector includes companies that develop novel delivery methods for therapeutics.
  
Industrial and Materials  
Industrial Manufacturing  
Aerospace and Defense
Aerospace and Defense is comprised of products and services with applications in aviation, space exploration, combat and national security, small arms, and other defense and security purposes.
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Product Details

Sector Buyer Target
Healthcare
Biopharmaceuticals  
Cardiovascular System  
Heart Disorders  
Angina  
Calcium Channel Blocking Agents
Therapeutics that treat chest pains by preventing the entry of calcium into heart muscle cells.

Target Products:

  • Nifedipine XL
  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of heart and circulatory system disorders in early stages of clinical research where human subject is involved.

Target Products:

  • PW2132 (Torsemide ER)
  
Vascular Disorders  
Hypertension  
Calcium Channel Blocking Agents
Therapeutics that treat high blood pressure by blocking the beta adrenergic receptors of the heart muscle and increasing the excretion of sodium ions, potassium ions, and water through urine.

Target Products:

  • Nifedipine XL
  
Neurology  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of nervous system and mental disorders in early stages of clinical research where human subject is involved.

Target Products:

  • PW4110
  
Research/Preclinical Stage Products
Therapeutics that are being investigated for the treatment of nervous system and mental disorders in very early stages of research where no human subject is involved.

Target Products:

  • PW4153
  • PW4159
  • PW4158
  
Pain Management  
Narcotics  
Opioids
Therapeutics that treat pain by binding to certain nervous system receptors which alter both the perception of pain as well as the emotional response to pain.

Target Products:

  • Opana ER (Oxymorphone Hydrochloride Extended Release)
  
Phase I/Phase II Clinical Stage Products
Therapeutics that are being investigated for the treatment of pain in early stages of clinical research where human subject is involved.

Target Products:

  • PW4142 (Nalbuphine ER)
  
Healthcare Services  
Distributors  
Medical Equipment  
General
Distribution of equipment and supplies used in a wide variety of medical settings.

Buyer Products:

  • Specialty Surgical Instruments , Inc.
  
Medical Devices  
Medical Supplies  
Safety and Sterilization  
Sterilization  
Tools/Supplies Protection
Devices used to prepare, store and handle surgical devices, which include covers, wraps, tray liners, pouches, cassettes and others.

Buyer Products:

  • Riley Medical Medical Instrument Containers
  • Ultra Containers Series
  • PolyVac
  
Outsourced Services
Development/Manufacturing Services  
Contract Manufacturing Organizations (CMO)  
Medical Devices
Contract Manufacturing Organizations that manufacture (and/or design, develop) medical devices and products for other organizations.

Buyer Products:

  • Symmetry Medical Total Solutions
  • Riley Medical Inc.
  
Drug Delivery Technology  
Oral Delivery  
Hydrogel Based/Polymer Coated
Drug Delivery Technologies used to deliver drugs in a jelly like base which are enclosed using a polymer matrix.

Target Products:

  • SyncroDose
  • Geminex
  • TIMERx
  
Polymer Coated
Drug Delivery Technologies used to deliver drugs in a polymer based matrix to hold/enclose the drug.

Target Products:

  • Gastroretentive Drug Delivery System
  
Industrial and Materials  
Industrial Manufacturing  
Aerospace and Defense  
Aerospace  
Aviation Equipment  
Other Aircraft Parts and Auxiliary Equipment and Services
Parts, auxiliary equipment, and specialized services required to build and maintain an aircraft. Some airport equipment is also included.

Buyer Products:

  • Mettis Aerospace Limited
  • Clamonta Limited
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Relationship Details

Key Competitors

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Target
  Johnson & Johnson n/a 190,863.999 18.04 16.24 3.34 3.16 13.68
Elan Corporation, plc (ADR) n/a 10,448.804 n/a -34.81 15.97 14.04 n/a
Biovail Corporation (USA) n/a 2,858.171 13.02 10.20 2.75 3.44 4.70
King Pharmaceuticals, Inc. n/a 2,574.611 8.36 5.85 1.25 1.23 1.90
K-V Pharmaceutical Company n/a 1,505.213 31.66 n/a 3.96 n/a 6.07
Alpharma Inc. n/a 929.815 16.08 22.14 1.36 1.29 1.93
Eurand N.V. n/a 731.542 n/a -79.52 6.39 6.35 9.57
Ligand Pharmaceuticals Inc. n/a 603.788 1.51 2.18 8.33 n/a 12.96
SkyePharma PLC (ADR) n/a 256.721 n/a -4.63 2.48 3.36 n/a
SCOLR Pharma Inc. n/a 128.925 n/a n/a 37.40 n/a 9.30
BioDelivery Sciences International, Inc. n/a 66.577 n/a -2.23 24.06 n/a n/a
Elite Pharmaceuticals, Inc. n/a 49.101 n/a -4.42 35.58 6.30 3.48
Purdue Pharma L.P. n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Dependent Suppliers

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Target
  Mylan Inc. n/a 3,903.698 17.63 12.21 2.17 1.39 5.06
DRAXIS Health Inc. (USA) n/a 226.270 22.92 26.80 2.63 2.60 2.15

- Defined by the Company - Defined by Others

Key Customers

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Buyer
  Johnson & Johnson 22.80% 190,863.999 18.04 16.24 3.34 3.16 13.68
Zimmer Holdings, Inc. 12.20% 19,572.195 21.92 20.99 5.33 5.16 9.66
Medtronic, Inc. n/a 63,885.152 22.20 20.98 5.10 4.77 11.85
Stryker Corporation n/a 30,301.805 32.62 30.47 5.49 5.10 7.78
Cardinal Health, Inc. n/a 23,811.086 12.33 15.90 0.27 0.25 15.71
St. Jude Medical, Inc. n/a 15,365.584 27.90 24.87 4.37 4.04 59.93
Smith & Nephew plc (ADR) n/a 11,279.700 26.35 24.44 3.75 3.48 19.92
Biomet, Inc. n/a n/a n/a n/a n/a n/a n/a
3i Group plc n/a n/a n/a n/a n/a n/a n/a
MAKO Surgical Corp. n/a n/a n/a n/a n/a n/a n/a
Target
  Mylan Inc. 89.10% 3,903.698 17.63 12.21 2.17 1.39 5.06
sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Endo Pharmaceuticals n/a 3,759.637 21.20 16.09 3.80 3.55 4.11
Merck KGaA n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Key Partners

  Name Dir Percent Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Target
  sanofi-aventis (ADR) n/a 120,772.157 22.87 12.33 2.99 3.11 n/a
Mylan Inc. n/a 3,903.698 17.63 12.21 2.17 1.39 5.06
Endo Pharmaceuticals n/a 3,759.637 21.20 16.09 3.80 3.55 4.11
DRAXIS Health Inc. (USA) n/a 226.270 22.92 26.80 2.63 2.60 2.15
Pharmaceutics International, Inc. n/a n/a n/a n/a n/a n/a n/a
Edison Pharmaceuticals, Inc. n/a n/a n/a n/a n/a n/a n/a
Merck KGaA n/a n/a n/a n/a n/a n/a n/a
Otsuka Pharmaceutical Co., Ltd. n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Financials

  Buyer Target Combined Entity
Income Statement
Operating Items
Revenue 256.3 3.0 259.3
Other Revenue 0.0 0.0 0.0
Total Revenue 256.3 3.0 259.3
Cost of Revenue 198.0 0.4 198.4
SG&A Expense 30.7 14.2 44.9
Depreciation & Amortization 0.0 0.0 0.0
Research & Development 0.0 23.7 23.7
Interest Expense 0.0 0.0 0.0
Other Operating Expense 0.0 0.0 0.0
Total Expenses 228.7 38.3 267.0
Operating Income 27.6 -35.3 -7.7
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng -6.1 1.8 -4.3
Other, Net -0.2 0.0 -0.2
Income Before Taxes 21.3 -33.5 -12.2
Income Taxes 5.0 0.0 5.0
Income After Taxes 16.2 -33.5 -17.3
Net Income - Excl. Xord. Items 16.2 -33.5 -17.3
Net Income - Incl. Xord. Items 16.2 -33.5 -17.3
Income Avail. to Common 16.2 -33.5 -17.3
Share Items
Basic Avg. Shares Outstanding 35.1 23.2 58.3
Basic EPS - Excl. Xord. Items 0.46 n/a -0.30
Basic EPS - Incl. Xord. Items 0.46 n/a -0.30
Full Dilution Adjustment 0.0 0.0 0.0
Fully Diluted Shares Outstanding 35.3 23.2 58.5
F.D. EPS - Excl. Xord. Items 0.46 n/a -0.30
F.D. EPS - Incl. Xord. Items 0.46 n/a -0.30
Balance Sheet
Assets
Cash and Equivalents 11.0 21.0 32.0
ST Investments 0.0 16.6 16.6
Accounts Receivable 53.1 0.6 53.7
Inventory 50.2 0.4 50.6
Prepayments and Advances 0.0 0.9 0.9
Other Current Assets 7.9 0.0 7.9
Current Assets 122.2 39.5 161.7
PPE 177.2 0.0 177.2
Accum D&A -67.2 0.0 -67.2
PPE, Net 110.0 3.6 113.7
Goodwill & Intangibles 198.4 3.1 201.5
Other Assets 0.0 0.0 0.0
Other LT Assets 1.1 5.1 6.2
Total Assets 431.8 51.4 483.1
Liabilities
Accounts Payable 23.0 1.3 24.4
Payable/Accrued 0.0 0.0 0.0
Accrued Expenses 12.7 2.6 15.3
ST Debt 1.1 0.0 1.1
Curr Port of LTD & Cap Lease Oblg 11.2 1.2 12.4
Other (Current) Liabilities 0.8 0.3 1.1
Current Liab. 48.7 5.5 54.2
LT Debt 62.6 10.8 73.4
Capitalized Lease Obligations 4.5 0.0 4.5
Total LT Debt 67.1 10.8 77.9
Deferred Taxes 12.3 0.0 12.3
Other LT Liab. 0.2 3.0 3.2
Total Liabilities 128.3 19.3 147.6
Shareholders Equity
Common Stock 0.0 0.0 0.0
Additional Paid in Capital 273.5 220.3 493.8
Retained Earnings 14.9 -188.3 -173.4
Other Equity 15.1 0.1 15.2
Total Equity 303.5 32.1 335.6
Total Liab. & Equity 431.8 51.4 483.1
Shares Outstanding 35.4 23.4 58.8
Cash Flow
Operating Cash Flow
CF Net Income 16.2 -33.5 -17.3
CF Depreciation 16.8 0.0 16.8
CF Amortization 1.9 0.0 1.9
CF Deferred Taxes 0.4 0.0 0.4
Other Non-Cash Items -0.8 0.0 -0.8
Change in Working Capital 3.4 4.5 7.9
Total Cash From Operating Activities 37.8 -29.0 8.8
Investing Cash Flow (not calculated)
Capital Expenditures -15.8 -2.4 -18.2
Other Investing Cash Flows -25.4 3.4 -22.0
Total Cash From Investing Activities -41.3 1.1 -40.2
Financing Cash Flow (not calculated)
Dividends Paid 0.0 0.0 0.0
Purchase Or Sale of Stock 0.8 3.5 4.3
Purchase and Retirement of Debt 1.3 12.0 13.3
Other Financing Cash Flow 0.8 -0.1 0.7
Total Cash From Financing Activities 2.8 15.4 18.2
Exchange Rate Effects 0.9 0.0 0.9
Net Change in Cash 0.3 -12.6 -12.3
Cash Taxes Paid 4.9 0.0 4.9
Cash Interest Paid 5.4 0.0 5.4