by Brendon Nafziger
, DOTmed News Associate Editor
Steris Corp. said this week it would buy privately held US Endoscopy for $270 million in an attempt to enter the gastrointestinal devices market.
The transaction is expected to close at the end of the second quarter of fiscal 2013, the Mentor, Ohio-based maker of sterilizers and other medical equipment said. US Endoscopy is also based in Mentor.
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"They have generated double-digit organic growth for many years through successful new product development, and the acquisition provides Steris immediate scale with a direct sales force in the U.S. and a strong brand name," Walt Rosebrough, Steris' president and CEO, said in a statement.
US Endoscopy, founded in 1991, earned nearly $14 million in income on about $70 million in revenues last year, Steris said.
Steris said it was financing the deal through a mixture of cash on hand and existing credit facilities, and also expected a tax break of about $50 million.
The company said the deal would likely be dilutive by 5 cents to earnings per share for fiscal 2013, but the outlook of $2 to $2.20 per share for fiscal 2013 remains unchanged. Steris said the deal should be accretive to earnings by fiscal 2014.
Steris said it would also purchase land and buildings used by US Endoscopy for about $7 million.