UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): June 22, 2011
Safeguard
Scientifics, Inc.
(Exact
name of registrant as specified in charter)
Pennsylvania |
1-5620 |
23-1609753 |
||
(State or other jurisdiction of incorporation) |
(Commission File Number)
|
(IRS Employer Identification No.)
|
435 Devon Park Drive, Building 800, Wayne, PA |
19087 |
|
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: 610-293-0600
Not applicable
(Former
name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events.
On June 22, 2011, Safeguard issued a press release announcing that partner company, Portico Systems, Inc., has signed a definitive agreement to be acquired by McKesson Health Solutions LLC. A copy of the press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated June 22, 2011
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Safeguard Scientifics, Inc. |
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Dated: June 22, 2011 |
By: |
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BRIAN J. SISKO |
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Brian J. Sisko |
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Senior Vice President and General Counsel |
Exhibit Index
99.1 |
Press Release dated June 22, 2011 |
Exhibit 99.1
Safeguard Scientifics Announces That McKesson Will Acquire Portico Systems for $90 Million
Sale of Healthcare IT Company Expected to Generate 4x Cash-on-Cash Return for Safeguard;
Represents Safeguard’s Fourth Substantial Exit Transaction in the Past Six Months with a Top Tier, Multinational Corporation
WAYNE, Pa.--(BUSINESS WIRE)--June 22, 2011--Safeguard Scientifics, Inc. (NYSE: SFE), a holding company that builds value in growth-stage life sciences and technology companies, today announced that technology partner company Portico Systems, Inc. has signed a definitive agreement to be acquired by McKesson.
McKesson has agreed to pay $90 million, in cash, for Portico, of which $5 million will be contingent upon the achievement of performance milestones. Safeguard expects to receive aggregate cash proceeds of approximately $38 million related to its equity interest in Portico, of which $2 million will be contingent upon performance milestones, representing a 4x cash-on-cash return. In addition, Safeguard will be repaid all amounts owed under its $5 million mezzanine debt facility with Portico. The consummation of the transaction is subject to standard conditions to closing, including applicable antitrust clearances and is expected to close in the third quarter of 2011.
“We are very excited to announce that McKesson has agreed to acquire Portico Systems, an exemplary company within our technology segment,” said Peter J. Boni, President and CEO of Safeguard Scientifics. “Highlighting all five of our key strategic themes that drive growth and opportunity—Maturity, Migration, Convergence, Compliance and Cost Containment—this sale represents our fourth successful exit transaction since December of last year. These well-timed exits have enhanced Safeguard’s financial strength and flexibility, enabling us to pursue high-growth opportunities, take advantage of our rich deal pipeline and expand our platform. We congratulate Ned Moore, Chairman, CEO and co-Founder of Portico, and the rest of the Portico team on a successful milestone.”
McKesson’s acquisition of Portico represents Safeguard’s fourth substantial exit transaction in the past six months involving a top-tier, global organization as the acquirer. The previous announcements included:
Since Safeguard initially deployed capital in Portico in August 2006, the company has emerged as a leading provider of software solutions that empower health plans to transform the performance of their provider networks and significantly reduce their administrative expenses. Today, Portico serves 33 customers with 42 million members annually.
“Portico has become a leader in Provider Network Management by offering solutions that streamline key business processes and optimize payments for the health insurance industry,” said Kevin L. Kemmerer, Executive Vice President and Managing Director of the Technology Group at Safeguard and a Board Member of Portico Systems. “We believe that this acquisition allows McKesson to broaden its product portfolio in order to address changing market needs.”
McKesson is dedicated to delivering the vital medicines, supplies and information technologies that enable the health care industry to provide patients better, safer care. In addition to its pharmaceutical distribution solutions, McKesson is a leader in healthcare information technology for payers and providers with solutions that include point-of-care evidence-based decision support, care management, medical and payment policy automation, claims auditing and fraud, waste and abuse programs.
“The ability to create new products that use value-based reimbursement to align payers and providers on achieving the right outcomes is a key strategic imperative,” said Emad Rizk, MD, president of McKesson Health Solutions. “We believe that Portico further enhances McKesson’s ability to help organizations efficiently navigate and manage increasingly complex delivery systems.”
“Five years ago, when Safeguard first provided us with growth equity capital as part of our Series A financing, we were a fledgling company with a big dream,” said Ned Moore. “Today, we find ourselves at the forefront of revolutionizing the way payers manage relationships with providers—ultimately driving down costs and increasing quality of healthcare. We couldn’t have done it without the support and commitment from our investors and our employees. We are excited about the potential that this acquisition offers Portico and look forward to continuing to execute against our game plan in this next chapter of our company’s history.”
Portico Systems has been recognized by a wide range of industry awards, including:
Portico Systems’ Chairman, CEO and co-Founder, Ned Moore has been named:
Portico Systems’ NPI Solution was recognized by Gartner in 2007.
About Safeguard Scientifics
Founded in 1953 and based in Wayne, PA, Safeguard Scientifics, Inc. (NYSE: SFE) provides growth capital for entrepreneurial and innovative life sciences and technology companies. Safeguard targets life sciences companies in Molecular and Point-of-Care Diagnostics, Medical Devices, Regenerative Medicine, Specialty Pharmaceuticals and selected healthcare services, and technology companies in Internet / New Media, Financial Services IT, Healthcare IT and selected business services with capital requirements of up to $25 million. Safeguard participates in expansion financings, corporate spin-outs, management buyouts, recapitalizations, industry consolidations and early-stage financings. For more information, please visit our website at www.safeguard.com, our blog at blog.safeguard.com or you can follow us on Twitter at twitter.safeguard.com or on LinkedIn at linked.safeguard.com.
About Portico Systems
Portico Systems’ innovative solutions enable health plans to reduce administrative, medical and IT costs. Portico’s exclusive focus on provider operations and 500+ staff-years of provider experience has allowed Portico to design the only modular end-to-end provider platform. For more information about Portico, please visit www.porticosys.com, subscribe to the RSS feed at blog.porticosys.com, and follow the company on Twitter at @porticosys and Facebook at www.Facebook.com/porticosys.
About McKesson Corporation
McKesson Corporation, currently ranked 15th on the FORTUNE 500, is a healthcare services and information technology company dedicated to making the business of healthcare run better. McKesson partners with payers, hospitals, physician offices, pharmacies, pharmaceutical companies and others across the spectrum of care to build healthier organizations that deliver better care to patients in every setting. McKesson helps its customers improve their financial, operational, and clinical performance with solutions that include pharmaceutical and medical-surgical supply management, healthcare information technology, and business and clinical services. For more information, visit www.mckesson.com.
Forward-looking Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking statements are subject to risks and uncertainties. The risks and uncertainties that could cause actual results to differ materially, include, among others, managing rapidly changing technologies, limited access to capital, competition, the ability to attract and retain qualified employees, the ability to execute our strategy, the uncertainty of the future performance of our companies, acquisitions and dispositions of companies, the inability to manage growth, compliance with government regulations and legal liabilities, additional financing requirements, the effect of economic conditions in the business sectors in which our companies operate, and other uncertainties described in the Company's filings with the Securities and Exchange Commission. Many of these factors are beyond our ability to predict or control. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. The Company does not assume any obligation to update any forward-looking statements or other information contained in this news release.
CONTACT:
Safeguard Scientifics, Inc.
John E. Shave
Vice
President, Business Development and Corporate Communications
610-975-4952