Shareholders of Draper-based Ballard Medical Products on Thursday approved the company's merger with tissue products giant Kimberly-Clark Corp. in a stock deal valued at $774 million.
The transaction was announced last December, but it was delayed while the Securities and Exchange Commission reviewed restructuring charges Kimberly-Clark took in 1995 and 1996. That inquiry concluded several weeks ago, after which Ballard went to its shareholders for approval of the deal.The merger, which closed Thursday, will be accounted for as a purchase by Kimberly-Clark and will involve a tax-free exchange of stock. The agreement calls for Ballard shareholders to receive $25 for each share of Ballard common stock, payable in shares of Kimberly-Clark common stock.
Ballard executive vice president Harold "Butch" Wolcott said Ballard and its shareholders continue to be excited about the acquisition.
"It has taken a long time to complete the transaction and do the deal," he said. "But we feel, as we always have, that it is a very good thing for Ballard in the long run, both for the shareholders and employees. We're excited to bring it to completion."
Wolcott estimated about 73 percent of voting shareholders approved the transaction. One percent voted against, he said.
Company founder Dale Ballard said during a Friday morning news conference that merging the company with a larger organization was necessary in order to grow the company to reach its full potential.
"The medical business is getting so large," Ballard said, "you cannot be a small company and truly survive or grow as you should grow. . . . We must have a partner, and we chose these people as our partner. Kimberly-Clark is the cleanest, most ethical, best company we could go with."
Kimberly-Clark will gain new products and technologies as it seeks to expand its professional health-care business. Ballard Medical makes disposable medical products such as catheters and defibrillator pads. More than 80 percent of all closed suction catheters, which help keep patients' airways clear during surgery, are Ballard products.
The combined operation will be managed by David R. Murray, president of Kimberly-Clark's Professional Health Care Sector. D. Mark Foreste will be the on-site general manager. Ballard, now 76, has retired with the completion of the merger, but he will remain as a consultant.
Robert Abernathy, group president of Kimberly-Clark Global Health Care, said there will be no cutbacks in Ballard's 1,000-person work force in Draper. Abernathy also said Ballard will retain its name, and that day-to-day operations will remain much as they were before the acquisition.
"The Ballard name will be retained and heavily utilized," Abernathy said Friday. "It would be foolish to lose the equity built up in the Ballard name."
Kimberly-Clark reported more than $12 billion in sales last year. Its global brands include Huggies, Kleenex and Scott. The company has manufacturing operations in 40 countries, including a diaper production plant in Ogden.