Notable Mergers and Acquisitions 10/6: (ICUI)/(PFE) (KLAC)/(LRCX) (TWTR)/(GOOG) (WCG)

October 6, 2016 9:59 AM EDT

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*** KLA-Tencor Corporation (NASDAQ: KLAC) and Lam Research Corp. (NASDAQ: LRCX) today announced that they have agreed to terminate their proposed merger agreement. The parties decided to it was not in the best interests of their respective stakeholders to continue pursuing the merger after the U.S. Department of Justice (the "DOJ") advised KLA-Tencor and Lam Research that it would not continue with a consent decree that the parties had been negotiating. No termination fees will be payable by either the Company or Lam Research in connection with the termination of the Merger Agreement.

"Although we are disappointed with this outcome, KLA-Tencor's performance over the past several quarters demonstrates the Company is executing our strategies at a high level and creating compelling value for the industry and for our stockholders," commented Rick Wallace, President and Chief Executive Officer of KLA-Tencor.

"Today our customer engagement and market leadership is strong and KLA-Tencor is delivering superior financial results. Growth and earnings momentum is expected to continue as we go forward, fueled by new products in the marketplace today, and with many more products in the pipeline," continued Mr. Wallace. "Additionally, our collaboration over the past year with Lam Research and with our customers has affirmed the value of closer cooperation between process and process control for new, enabling solutions. For that reason, we plan to explore collaboration opportunities with Lam Research around programs identified as beneficial to our customers."

*** ICU Medical Inc. (Nasdaq: ICUI) and Pfizer Inc. (NYSE: PFE) announced that they have entered into a definitive agreement under which ICU Medical will acquire all of Pfizer’s global infusion therapy business, Hospira Infusion Systems (HIS), for $1 billion in cash and stock. The Hospira Infusion Systems business includes IV pumps, solutions, and devices that, when combined with ICU Medical’s existing businesses, will create a leading pure-play infusion therapy company, with estimated pro forma combined revenues of approximately $1.45 billion based on trailing twelve month results as of June 2016.

Under the terms of the agreement, Pfizer will receive approximately $400 million in newly issued shares of ICU Medical common stock and $600 million in cash from ICU Medical subject to customary adjustment for net working capital. Upon completion of the transaction, which the companies expect to occur in the first quarter of 2017 subject to customary closing conditions including required regulatory approvals, Pfizer will own approximately 16.6 percent of ICU Medical. In addition, so long as Pfizer continues to hold 10% or more of ICU Medical’s common equity, it will have the right to nominate one director to the company’s board of directors in ICU Medical’s proxy materials, and Pfizer has agreed to certain restrictions on transfer of its shares for at least 18 months.

John Young, Group President of Pfizer Essential Health commented, “We are pleased that Hospira Infusion Systems is combining with ICU Medical, and we believe the combined company will be well positioned in the marketplace to deliver value to customers through its strong product portfolio and the expertise of colleagues from both companies. I’m proud of the Hospira Infusion Systems team and their positive impact on patients around the world.”

The acquisition complements ICU Medical’s existing business by creating a company that has a complete IV therapy product portfolio from solutions to pumps to non-dedicated infusion sets, and gives the company a significantly enhanced global footprint and a platform for continued competitiveness and growth. With an integrated product offering, ICU Medical will hold industry-leading positions in key segments and have access to the full US infusion marketplace with a compelling product portfolio.

“The combination of these two businesses is the natural evolution of a productive relationship that began more than 20 years ago when Hospira began integrating ICU Medical’s needlefree technology into their infusion offering globally,” explained Vivek Jain, ICU Medical’s Chief Executive Officer. “By acquiring the Hospira Infusion Systems business, currently our largest single customer, we create a pure-play infusion business with the focus and scale to compete globally, eliminate our single customer concentration issue, and have a significant value creation opportunity as a much larger company. We look forward to serving more customers as we continue to bring clinical and economic value to the marketplace.”

ICU Medical’s financial advisors for the transaction were Barclays and Wells Fargo Securities, LLC, and Latham & Watkins acted as its legal advisor. Goldman, Sachs & Co. and Guggenheim Securities served as Pfizer’s financial advisors for the transaction, while Skadden, Arps, Slate, Meagher & Flom LLP and Ropes & Gray LLP served as its legal advisors.

*** Twitter (NYSE: TWTR) is trading lower Thursday amid reports from Recode Google (Nasdaq: GOOGL) will not make a bid for the company. Apple (Nasdaq: AAPL) is also said to be out of the running.

*** WellCare Health Plans, Inc. (NYSE: WCG) announced that it has entered into an agreement with Care1st Health Plan, an affiliate of Blue Shield of California, to acquire its subsidiaries Care1st Health Plan Arizona, Inc. and ONECare by Care1st Health Plan of Arizona, Inc. (together, "Care1st Arizona"), managed care companies that provide Medicaid and Medicare benefits to approximately 114,000 beneficiaries in Maricopa and Pima counties, Arizona's largest geographic service areas.

"Our acquisition of Care1st Arizona provides us with an opportunity to expand our footprint into Arizona's growing Medicaid and Medicare markets," said Ken Burdick, WellCare's chief executive officer. "Care1st Arizona is a well-regarded, quality health plan that has served government-sponsored programs in Arizona for more than 13 years. Its focus on community-based relationships and integrated delivery of medical care and social services aligns with our approach to providing improved health outcomes for low-income families, children, the disabled, seniors and individuals with complex medical needs."

Under the terms of the agreement, WellCare will acquire Care1st Arizona from Care1st Health Plan for approximately $157.5 million, inclusive of statutory capital and subject to certain adjustments. The transaction is expected to be funded with available cash on hand and to close by the first quarter of 2017, pending regulatory approvals and other customary closing conditions. The transaction is also expected to be accretive to earnings per diluted share in the first year following the close of the acquisition. WellCare expects to provide additional details regarding the acquisition during its third quarter 2016 earnings conference call that is scheduled for November 1, 2016.

Bass, Berry & Sims PLC served as legal advisor to WellCare. Cain Brothers served as financial advisor and Kutak Rock LLP served as legal counsel to Blue Shield of California and Care1st Arizona.

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