UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): JULY 29, 1998
Commission File No. 1-12575
UTAH MEDICAL PRODUCTS, INC.
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(Exact name of Registrant as specified in its charter)
UTAH 87-0342734
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7043 South 300 West
Midvale, Utah 84047
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Address of principal executive offices
Registrant's telephone number: (801) 566-1200
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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a) On July 29, 1998, Utah Medical Products, Inc. ("UM" or "the Company")
entered into an asset purchase agreement with Bard Access Systems, Inc., a Utah
corporation, ("BAS") and Gesco International, Inc., a Massachusetts corporation,
("Gesco") to acquire the BAS and Gesco neonatal product line, including
manufacturing processes and inventories, intellectual property rights and
business. BAS and Gesco are subsidiaries of C.R. Bard, Inc. ("Bard"), a large
medical device manufacturer and marketer, including vascular, urological,
oncological diagnostic and interventional products.
The well-established GescoR neonatal products are used in Level III Neonatal
Intensive Care Units (NICU's) of hospitals for the care of the most critically-
ill babies. Gesco's products include Umbili-Cath umbilical vessel catheters,
Nutri-Cath feeding tubes, Uri-Cath urinary drainage system, the patented Hemo-
Nate disposable blood filtration system, Hemo-Tap spike, Myelo-Nate lumbar
puncture supplies, the patented Pala-Nate oral protection appliance, Dialy-
Nate disposable peritoneal dialysis system, Thora-Cath chest tubes, general
purpose catherization trays and other supplies. UM previously sold specialty
patented products to NICU's, including the Disposa-Hood, a disposable infant
oxygen hood designed to control a neutral thermal environment, and Deltran
disposable pressure transducer systems for continuously monitoring neonatal
blood pressure. UM is a leading developer, manufacturer and marketer of
primarily disposable medical devices for specialized hospital use, especially in
the NICU and in labor and delivery, as well as specialty products used by Ob/Gyn
physicians in their offices and clinics.
The broad array of specialty neonatal products helps further enhance UM's
critical mass for marketing to some of the most sensitive areas of hospital
care, including labor and delivery and the NICU. The products themselves fit
with UM's reputation of providing the best in quality and reliability for
clinicians who place high value on patient safety. Bard's commitment to
maintaining manufacturing processes that are well-engineered and documented will
greatly facilitate the speed of the integration into UM's own operations. UM
will begin manufacturing the products in its Midvale facility immediately. Bard
and UM have entered into a supply agreement where Bard will provide UM with the
small diameter silicone tubing which is a key raw component of many of the Gesco
catheter products. In addition to the products acquired, BAS has agreed to
allow UM to exclusively distribute its 2.0 French neonatal Per-Q-Cath catheter.
Terms of the acquisition include an initial UM cash payment of approximately
$4.2 million, paid in cash, for the Gesco existing finished goods and raw
materials/WIP inventories, Gesco's manufacturing equipment and tooling, plus the
specifications, procedures, techniques, practices and trade secrets required to
produce the products, consideration for BAS's agreement to not compete with UM,
intellectual property rights including U.S. Patent Nos. 5,195,513 and 4,453,927
and a perpetual license of the Gesco name and stork character. An additional
milestone payment of $0.3 million will be made if 1999 revenues exceed a
targeted amount. In order to provide incentive for BAS' continued interest in
UM's success with the product line, UM agreed to pay BAS a 1% royalty on net
sales of Gesco neonatal products for five years.
The acquisition will be considered an asset purchase for accounting purposes.
Available credit under the Company's existing $10,000,000 unsecured revolving
promissory note with First Security Bank was used to finance the purchase.
With the assistance of BAS and Gesco personnel during a transition period,
Gesco's manufacturing operations from San Antonio, Texas and BAS' administration
and distribution from Salt Lake City, Utah, will be integrated into UM's
Midvale, Utah facility.
In the U.S., the Gesco neonatal products will be sold through BAS' existing
distributor network through the end of 1998. In 1999, UM will rationalize the
distributor network with its own direct sales resources. Utilizing UM's ISO
9001 certification and its Ireland facility, UM will seek to expand Gesco
neonatal product sales internationally through its established overseas
distributors.
b) Equipment and other physical property acquired through this
transaction were used prior to this transaction by Gesco for the manufacture of
medical devices. UM intends to continue such use of such equipment and other
physical property.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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a) Financial statements are not required by this item.
b) Pro-forma financial statements are not required by this item.
c) Exhibits
SEC
Exhibit # Reference# Title of Document
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1 2 Asset Purchase Agreement, dated July 29, 1998 between
Utah Medical Products, Inc., Bard Access Systems,
Inc., and Gesco International, Inc.*
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* Omitted schedules and similar attachments to this exhibit that are listed
and briefly identified will be furnished supplementally to the Commission
upon request.
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SIGNATURES
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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, thereunto duly authorized.
UTAH MEDICAL PRODUCTS, INC.
REGISTRANT
Date: 8/7/98 By: /s/ Kevin L. Cornwell
Kevin L. Cornwell
CEO and CFO