Medical processor Synetic Inc. has reached an agreement to buy California molder Point Plastics Inc. for $86 million, a move that is causing Synetic to rethink splitting its health-care communications and plastics businesses.
Synetic also is in talks to acquire additional businesses that complement its porous plastics manufacturing subsidiary, Porex Corp., Chairman Martin Wygod said in a statement filed March 9 with the Securities and Exchange Commission.
``We are committed to growing our plastics business through both internal development and acquisitions,'' he said.
Elmwood Park, N.J.-based Synetic had decided late last year to sell 14-16 percent of Porex in an initial public offering, selling 2.5 million shares for $14.50 a share to raise cash for acquisitions and general corporate purposes.
But Synetic said in the SEC filing it put that on hold because it reached an agreement to purchase Point Plastics, a maker of high-volume disposable plastic products such as pipette tips, micro-centrifuge and other tubes for research and clinical markets.
``As a result of this acquisition and other potential growth opportunities, we have decided not to proceed with the previously announced initial public offering of Porex at this time,'' Wygod said. ``We will, however, evaluate all of the various available alternatives regarding the separation of our two principal lines of business,'' plastics filtration and health-care communications, after its fiscal year ends June 30.
Besides the plastics acquisition, Synetic also has purchased two companies in the past 15 months that specialize in Internet-based clinical commerce or that help health-care groups set up intranets.
Synetic officials could not be reached for comment.
Point had purchased filters for its pipettes from Porex, and was not looking for a buyer until Synetic raised the issue, said Point Chief Executive Officer Philip Stolp.
``We've got great respect for the company,'' Stolp said. ``They have a keen interest to expand in this area.''
Stolp, one of the founders of 22-year-old Point, said the company just emerged from a record year for sales, but the 57-year-old CEO said he was interested in selling because he had some ``succession issues'' for the firm to deal with.
Point had $25 million in sales in 1997. The company has 360 injection molding machines in its single facility in Petaluma, Calif., with clamping forces of 2-75 tons. Stolp is the major shareholder, but the company is 50 percent employee-owned.
The deal is structured to give 60 percent of the shares in Synetic common stock and 40 percent in cash. Shareholders representing 51 percent of Point have agreed to vote in favor of the deal, which the companies said they hope to complete in late spring.
Synetic reported sales of $30.2 million for the last six months of 1997, all from its plastics businesses, but spent $5.3 million on developing its health-care communications business, according to February SEC documents.
Synetic also makes pipette tips, plastic vials, deodorant applicators and filters.
Stolp said he and Thomas Taggart, Point chief operating officer, have five-year contracts to remain with Synetic.
In unrelated news, the SEC earlier this month filed a civil suit against one of Synetic's directors, California lawyer Roger Licht. SEC accused Licht of insider trading with information about the sale of Synetic from its former parent Medco Containment Services Inc. in 1994 and the acquisition of Medco by Merck & Co. in 1993.
SEC said it is seeking more than $200,000 from Licht and four other people, and has reached a settlement with four additional people involved. A Synetic statement said the company is not targeted, and said it expects Licht to be exonerated.