Cardiac Science and Quinton Cardiology to Merge

Cardiac Science Inc. (Irvine, CA), a manufacturer of automatic public-access defibrillators, and Quinton Cardiology Systems Inc. (Bothell, WA), which makes cardiovascular monitoring equipment, have announced their intention to merge and form a new holding company to be called Cardiac Science Corp.

In a joint statement, the companies cited their “similar missions, business models, technology expertise, and operational processes.” The companies said the merger will “combine their respective strengths in development, manufacturing, and marketing of cardiology devices, services, and supplies and create a diversified, well-capitalized medical technology growth company with a broad portfolio of cardiology-related products.”

The merger is expected to reduce annual operating expenses by $10 million, eliminate $9 million in annual interest expense, and generate tax savings of at least $4 million.

Under the terms of the agreement, each share of Cardiac Science will be worth 0.10 of a share in the new company, while each Quinton share will be valued at 0.77. The company will be 51% owned by current Cardiac Science shareholders and 49% owned by holders of Quinton Cardiology.

Management of the new company will represent a blend of the merging entities. John R. Hinson, Quinton's current president and CEO, and Michael K. Matysik, the company's chief financial officer, will continue in those positions for the new company. Raymond W. Cohen, Cardiac Science's current chairman, will serve as chairman of the new firm.

“Cardiac Science has demonstrated excellent growth during the past several years by leveraging its intellectual property position to achieve leadership in the fast-growing public-access defibrillation market,” observed Quinton's Hinson. “We believe the combination of Quinton and Cardiac Science will yield significant operational, product development, and marketing synergies. With a well-established global presence, millions in cost savings, and a balance sheet free of long-term debt, we expect the new company to be well-positioned to achieve significantly greater size and scale.”