Attached files
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8-K - FORM 8-K - CRYOLIFE INC | cryolife8k12110.htm |
EX-99.3 - BOOKLET - CRYOLIFE INC | cryolife8k12110ex993.htm |
EX-99.2 - LETTER - CRYOLIFE INC | cryolife8k12110ex992.htm |
EX-99.4 - INSERT - CRYOLIFE INC | cryolife8k12110ex994.htm |
EX-99.5 - PRESS RELEASE - CRYOLIFE INC | cryolife8k12110ex995.htm |
EXHIBIT
99.1
Important
Information for Medafor Shareholders
January
21, 2010
Dear
Fellow Medafor Shareholder:
You have
probably seen the headlines regarding CryoLife’s increased stake in Medafor and
our proposal to the Medafor board of directors to combine our two
companies. I wanted to take this opportunity to personally explain
why we have taken this action, why our proposal is financially and strategically
compelling, and what you can do to make your opinion heard.
We have
great regard for Medafor’s MPH® polysaccharide hemostatic technology, and we
believe it has significant, untapped growth potential. CryoLife
currently has the exclusive right to distribute this technology under the
private label HemoStase® within the U.S. for use in cardiac and vascular
surgery, and in many international markets for cardiac, vascular, and general
surgery, subject to certain exclusions. As Medafor’s largest
distributor, CryoLife achieved $6 million in sales of
HemoStase in 2009.
Unfortunately,
we do not believe that Medafor has the resources to maximize the potential of
this exciting technology on its own given the capital and other constraints
facing the company. At the same time, we believe it is critical that
Medafor fully develop this technology in order for Medafor shares to realize
their full potential value. We have acquired a large stake in Medafor
as a first step in our efforts to combine CryoLife and Medafor, drive additional
growth of HemoStase and related products, and deliver earnings and revenue
growth for CryoLife and Medafor shareholders.
CryoLife
and Medafor: A Strong Strategic Fit
We
believe that Medafor’s hemostatic technology serves as a perfect complement to
CryoLife’s product portfolio, particularly our BioGlue® technology. A
combination of our companies would allow us to offer surgeons a full range of
products to assist them in controlling and preventing bleeding. CryoLife’s
financial strength (positive cash flow and positive earnings growth), strong
direct sales force (45 direct sales representatives in the U.S. and direct sales
forces in the United Kingdom and Germany), international distribution network,
and experienced management team would allow us to drive additional growth of
Medafor beyond its current capabilities, and create greater value for all
shareholders.
Combination
of CryoLife and Medafor: Our Proposed Offer
On
January 13, 2010, we sent a letter to Medafor’s board of directors proposing to
acquire all of Medafor’s remaining outstanding shares for $2.00 per share, to be
paid in cash and stock, subject to completion of reasonable due
diligence. We believe the price we are offering is full and fair. In
fact, it represents a significant premium to that which we understand Medafor’s
management and board have recently offered to convert debt into equity, and is
equivalent to the value at which recent stock transactions have taken
place. It is also in line with the valuations of comparable public
companies and with recent comparable publicly-disclosed M&A
transactions.
While we
believe our initial proposal is a strong one, we welcome
further dialogue and are open to negotiation with the Medafor
board. As we indicated in our recent communication to Medafor, we do
not have the most current information regarding Medafor and its prospects, and
we are willing to negotiate in good faith to determine Medafor’s appropriate
value.
Negotiations
with the Medafor board would also allow us to determine the right mix of cash
and stock. We believe a cash/stock offer is appropriate and
attractive, as the cash component would provide Medafor shareholders with
immediate and certain value, while the stock portion would allow shareholders to
participate in future upside through continued ownership of the combined
company. We think the prospects for CryoLife are strong and that
Medafor shareholders will be able to realize additional value by owning our
stock. It is also important to note that ownership of CryoLife stock
would provide you with further liquidity, as you would be able to trade this
stock on the New York Stock Exchange. That said, given the current
economic climate, we recognize that cash may be more important to some
shareholders, and we are therefore prepared to evaluate how to best address
this.
Medafor’s
board has to date refused to enter into negotiations regarding our
proposal. Their refusal to
enter into discussions with us hurts Medafor shareholders as it impedes
your ability to receive a fair price for your shares. The goal of
this letter is simply to provide you with more information about our proposal
and encourage you to contact Medafor’s board to make your voice heard if you
have an opinion about Medafor’s future and our proposal.
WHAT YOU CAN DO
NOW
As Medafor’s largest shareholder, we
believe that it is important for every shareholder to communicate with the
Medafor board. If you have an opinion about
anything we’ve discussed in this letter, please contact your board members
today and let them know what you
think. The phone numbers and addresses for the Medafor board and
management are 877-633-2367 and 2700 Freeway Boulevard, Suite 800, Minneapolis,
MN 55430. Make sure your board knows where you
stand!
Enclosed
with this letter is a copy of CryoLife’s 25th
anniversary book, which provides information concerning CryoLife, its products
and services, and the thousands of people who have been positively impacted by
those products and services. If you would like more information about
CryoLife and its proposal to acquire Medafor, please visit
www.cryolife.com/medaforoffer or contact Nina Devlin at
212-704-8145. Additionally, if you would like to receive any future
communications via email, please send an email request to
medaforshareholderinfo@cryolife.com.
We are
optimistic that you will be as enthusiastic as we are about what CryoLife and
Medafor can accomplish together. I look forward to communicating with
you again in the near future.
Sincerely,
/s/
Steve G. Anderson
Steven G.
Anderson
Founder,
CEO and President
IMPORTANT
This
letter is provided for informational purposes only and is not an offer to
purchase nor a solicitation of offers to sell shares of Medafor or CryoLife.
Subject to future developments, CryoLife may file a registration statement
and/or tender offer documents and/or proxy statement with the SEC in connection
with the proposed combination of the two companies. Shareholders
should read those filings, and any other filings made by CryoLife with the SEC
in connection with the combination, as they will contain important
information. Those documents, if and when filed, as well as
CryoLife’s other public filings with the SEC, may be obtained without charge at
the SEC’s website at www.sec.gov and at CryoLife’s website at
www.cryolife.com.