Texas firm bids for Kirschner


Texas-based Maxxim Medical Inc. made a last-minute offer yesterday for Kirschner Medical Corp., just as the Timonium medical supply company was beginning final preparations for a merger with Biomet Inc.

Maxxim, maker of physical therapy products and prepackaged sterile trays for operating rooms, offered about $36 million, topping Warsaw, Ind.-based Biomet Inc.'s bid of $34.8 million.

Maxxim's offer involves $10.50 a share in cash, or two shares of its common stock for every three Kirschner shares, a deal valued at $10.13 a share at yesterday's closing prices.

Kirschner yesterday was evaluating the unsolicited offer, which came less than 12 hours after it accepted an offer to merge with Biomet, an orthopedic equipment manufacturer.

Biomet had offered 1.05 common shares of its common stock for every Kirschner share, or about $34.8 million, topping a bid by Orthomet Inc., of Minneapolis.

Orthomet started the process in late May, and its final offer expired Monday.

The bidding war signals consolidation in yet another segment of the health care industry -- medical equipment.

In the case of Maxxim, the attraction is that Kirschner makes some of the supplies it distributes to hospitals in pre-packaged operating room trays.

The Sugar Land, Texas, firm has been assembling companies that make the equipment it distributes for several years. Its revenues are expected to top $200 million this year, up from $130 million last year.

Kirschner shares climbed 43.75 cents, to $9.875 yesterday. Biomet's stock closed unchanged, at $9.625, after dropping Tuesday, and Maxxim shares dropped 50 cents yesterday, to $15.

The market apparently doesn't believe that a merger would improve the earnings of either Biomet or Maxxim, analysts said.

"My first draft will say, 'No, this is not additive to earnings,' " said Aaron L. Shackelford, vice president for health care at Principal Financial Securities in Dallas, referring to Maxxim.

Kirschner Chief Financial Officer Lewis Parker said his firm is "working hard to do a definitive agreement" with Biomet but has asked its financial advisers to examine the Maxxim bid.

"We're not sure who is in or not," he said. "It's a minute-by-minute thing."

In Indiana, Biomet was standing by to see what Kirschner will do. The maker of reconstructive joints such as hips, knees, and shoulders already upped its bid Monday in the hopes of being able to expand its product line and its geographic presence in the mid-Atlantic through a merger with Kirschner.

"A lot of us want Maryland companies," said company spokeswoman Kathy Waggener.

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