CooperSurgical Developing Gynecologic Surgery Division

CooperSurgical, the women’s healthcare unit of the Cooper Companies, Inc. (Lake Forest, CA), has entered the gynecological surgery market through the acquisition of two privately held device companies. Although details of the transactions were not released, the company reports it expects the combined businesses to contribute $10 million in revenue in fiscal 2006 and about $50 million annually by 2010.

Bender: Building on success.

“Since its inception in 1990, CooperSurgical has become a successful competitor against the larger and more diversified medical device manufacturers that compete in the physician’s office segment of women’s healthcare,” says A. Thomas Bender, Cooper’s chief executive officer. “Now we’re capitalizing on this success by entering the rapidly developing gynecologic surgery market with these building-block acquisitions.”

CooperSurgical announced its acquisition of the two companies, NeoSurg Technologies Inc. (Houston) and Inlet Medical Inc. (Eden Prairie, MN), in late November. NeoSurg manufactures reusable and disposable trocar access systems for use in laparoscopic surgery, and Inlet produces trocar closure systems and pelvic floor reconstruction procedure kits.

Over the next three years, CooperSurgical will merge the acquired businesses into a new gynecological surgery unit. The company, which plans to add additional products to the division’s line, estimates the U.S. market for gynecological surgery products to be more than $1 billion.

Starting in 2006, the company plans to begin developing a surgical sales force. In light of the expenses associated with this move, the Cooper Companies reports that it expects earnings-per-share dilution of about 20 cents in fiscal 2006 and about 15 cents in 2007. The company expects the acquisitions to add about 2 cents per share in 2008.

In addition to CooperSurgical, the Cooper Companies operates the CooperVision business unit, which manufactures contact lenses and ophthalmic surgery products. CooperVision contributes more than 80% of the company’s overall sales.

Concurrent with the acquisitions announcement, Cooper Companies reported that it had lowered its revenue guidance for its fourth quarter from between $238 million and $242 million to between $219 million and $222 million. The lowered guidance, according to the company, is attributed mainly to a lower U.S. dollar conversion rate and softness in sales of its spherical soft contact lenses. The lowered guidance represents a reduction of CooperVision’s estimates from between $210 million and $213 million to between $191 million and $193 million. Revenue estimates for CooperSurgical remain unchanged.

In 2006, the company expects CooperSurgical to achieve revenues of $123 million to $126 million, up from projected 2005 revenues of between $108 million and $109 million.

© 2005 Canon Communications LLC

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