SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 30, 1998
BIOMET, INC.
(Exact name of registrant as specified in its charter)
Indiana
(State or other jurisdiction of incorporation or organization)
0-12515
(Commission File Number)
35-1418342
(I.R.S. Employer Identification No.)
Airport Industrial Park, P.O. Box 587, Warsaw, Indiana 46581-0587
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (219)267-6639
Item 2. Acquisition or Disposition of Assets.
On February 2, 1998, Biomet, Inc. ("Biomet") and Merck KGaA, Darmstadt,
Germany, ("Merck") announced the closing of a joint venture (the "Joint
Venture") to manufacture, market and sell orthopedic and biomaterials products
in Europe and elsewhere under the name "Biomet Merck". Merck KGaA is a global
pharmaceutical company headquartered in Darmstadt, Germany, and is not
affiliated with Merck & Co., Inc. of Whitehouse Station, New Jersey, U.S.A.
The Joint Venture was formed through the organization of a new Dutch
commanditaire vennootschap, or closed limited partnership (the "CV"). Biomet
is the general partner of the CV with a 50% partnership interest, and Merck KGaA
is the limited partner of the CV with a 50% partnership interest. Each party
contributed or is in the process of contributing its European operations within
the Joint Venture's field of operation to the CV. The business entities
already contributed or being contributed to the Joint Venture by each partner,
their respective countries of organization and the percentage owned by the CV
are set forth below.
Country of
Company Organization Percent Owned
Contributions by Biomet:
Biomet Ltd. United Kingdom 100%
Biomet SpA Italy 100%
Biomet Deutschland GmbH Germany 100%
Industrias Quirurgicas de Levante, SA Spain 100%
Biomet SA France 100%
Biomet Polska Sp. z.o.o. Poland 51%
Mediplant NV/SA Belgium 100%
Ortomed B.V. The Netherlands 100%
Orthopaedics Holdings C.V. The Netherlands 100%
Biomet A/S Denmark 30%
Biomet Norge Norway 40%
Ortra Holdings SA Switzerland 100%
Canzek AG Switzerland 100%
CDO Ltd. United Kingdom 100%
Kirschner Hellas Greece 30%
Contributions by Merck KGaA:
Merck Biomaterial France France 100%
Merck Biomaterial Espana S.L. Spain 100%
Artos Medizinische Produkte GmbH Germany 100%
Merck Biomaterial GmbH Germany 100%
In addition, the assets constituting the biomaterials divisions of Merck KGaA's
subsidiaries in the United Kingdom, Portugal, Belgium, The Netherlands and
Austria will be contributed to the CV.
The Joint Venture Agreement includes provisions providing for the governance of
the Joint Venture and establishing certain economic arrangements between the
parties. Generally speaking, the day-to-day operations of the Joint Venture
will be conducted under the authority of a board of directors composed of two
representatives of each party. Biomet's representatives will have a deciding
vote on general operational matters. Extraordinary decisions, such as
significant acquisitions or dispositions of businesses or assets, amendments to
the charter documents of the Joint Venture, liquidation or dissolution of the
Joint Venture, borrowings outside the ordinary course of business, issuances of
additional equity interests in the JV and certain related party transactions
between the Joint Venture entities and Biomet or its affiliates, will require
the vote of a majority of the board of directors, including one member nominated
by each party. The Joint Venture Agreement further provides for Merck KGaA to
receive certain preferential distributions of cash flow with respect to fiscal
years 1999, 2000 and 2001 based upon the level of after-tax profit achieved by
the Joint Venture, and for Biomet to receive an annual preferential distribution
of approximately $4.4 million in each of the first seven years of the Joint
Venture. Merck KGaA also has the right, beginning in fiscal 2002 and ending in
fiscal 2008, to require Biomet to purchase Merck KGaA's interest in the Joint
Venture at a formula price based on a multiple of the Joint Venture's earnings
before interest and taxes. This right may also be exercised following any
"change in control" of Biomet (as defined in the Joint Venture Agreement) prior
to the end of fiscal 2023.
The Joint Venture will enter into license, supply and distribution agreements
with Biomet providing for the manufacture and sale by certain of the Joint
Venture companies of Biomet's orthopedic products and by Biomet of certain
biomaterials and orthopedic products of the Joint Venture companies.
Based on the balance sheets of the contributed entities as of October 31, 1997,
the total assets of the Joint Venture are approximately $190 million. The Joint
Venture will continue to use the assets of the various business entities
contributed to it to manufacture, market and sell orthopedic and biomaterials
products primarily in Europe and in certain other countries throughout the
world.
Item 7. Financial Statements and Exhibits.
(a)-(b) The financial statements of the acquired businesses and the pro forma
financial information required to be filed as part of this report are not
included herewith, but will be filed by amendment not later than 60 days after
the filing hereof.
(c) See Index to Exhibits. The schedules and exhibits to the Joint Venture
Agreement filed as Exhibit 2.01 hereto are not included in reliance upon Item
601(b)(2) of Regulation S-K. The undersigned registrant agrees to furnish
supplementally a copy of any omitted schedule or exhibit to the Joint Venture
Agreement to the Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Biomet, Inc.
Date: February 16, 1998 By: /s/ Gregory D. Hartman
Gregory D. Hartman
(Vice President - Finance)
EXHIBIT INDEX
Number Assigned
In Regulation
S-K Item 601 Description of Exhibit
(2) 2.01 Joint Venture Agreement
(20) 20.01 Press Release issued on February 2, 1998