Filtertek Inc. of Hebron, Ill., is receiving a $7.3 million settlement of patent litigation involving needle-free connectors and, separately, is closing a Puerto Rico plant.
A subsidiary of San Diego-based Alaris Medical Inc. is taking a worldwide, unrestricted license from Filtertek on the needle-free valve technology.
Filtertek and Alaris agreed to ask a U.S. District judge in Rockford, Ill., to dismiss pending suits that each side had filed in 2000 and 2001.
Enactment of the federal Needlestick Safety and Prevention Act of 2000 increased demand for the products, which are designed to reduce health-care worker injuries and concerns about transmitted diseases. Most components for needle-free connectors are molded of PET copolymers, polypropylene and silicone or thermoplastic elastomers.
Filtertek parent Esco Technologies Inc. of St. Louis said it anticipates a settlement gain of about $2.1 million to $2.3 million to be recorded during the quarter ending June 30. Esco will book the remaining unrealized gain in pretax income over the patent's eight remaining years.
Filtertek employs about 900, operates 110 presses and has annual sales of about $85 million.
In Esco's quarterly report issued May 14, the company said it is proceeding to close Filtertek's operation in Patillas, Puerto Rico, and is moving the manufacturing to Hebron and another plant in Ciudad Ju rez, Mexico. Esco will take a charge of $3 million and $4 million, primarily relating to a write-down of the Puerto Rico facility to its appraised value.
The move will cost $1.5 million to $2 million and is expected to generate annual savings of at least $2 million.
Publicly traded Alaris employs about 2,900 and reported profit of $8.2 million on 2002 sales of $460.3 million.