Asclepion-Meditec and Carl Zeiss unify ophthalmic forces

The two companies have combined operations to create a leading global provider of medical equipment for ophthalmology.

A leader in the field of ophthalmic systems was recently formed by the merger of two German companies. Asclepion-Meditec AG and Carl Zeiss Ophthalmic Systems AG, the ophthalmic unit of the Carl Zeiss Group, have joined to form Carl Zeiss Meditec AG.

After more than 10 years of considering a merger, officials from Asclepion and Carl Zeiss announced in November 2001 that the two entities would ideally complement one another, and subsequently entered a merger deal.

In May, shareholders of Asclepion-Meditec unanimously approved the merger. Carl Zeiss shareholders had already consented. The merger officially took effect in the beginning of July. The new corporation will continue to be traded on the Frankfurt Stock Exchange. (DE: 531307).

Spokespersons for the new entity say the combined corporation will offer a complete continuum of ophthalmic products for diagnosis, therapy and follow-up treatment for four ophthalmic areas: refractive surgery, cataract surgery, glaucoma and retinal disorders.

With subsidiaries in the United Kingdom and Italy, Asclepion has been one of Europe’s largest suppliers of laser systems for ophthalmology, dermatology and dentistry. Asclepion’s products in refractive surgery include its CRS-Master computerized topography system (TOSCA) and wavefront system (WASCA) and the MEL 70 G-Scan excimer laser.

Asclepion’s presence in the U.S. ophthalmic market will be enhanced by its fusion with Carl Zeiss, a world leader in ophthalmic diagnostic systems, which has a strong U.S. presence. Because Zeiss includes the former Humphrey Instruments, about half the new corporation’s sales will be generated in the United States. This merger gives Asclepion products better access to the important American ophthalmic market.

A special strength of Carl Zeiss Ophthalmic Systems has been its innovative products, such at the IOLMaster Optical Coherence Biometer, which has garnered much attention recently for its ultraprecise eye measurement. Carl Zeiss Ophthalmic also brings to the new company the Optical Coherence Tomographer Model 3000 (OCT3), a diagnostic medical device that works much like ultrasound, except that it uses light rather than sound, achieving better resolution.

After the merger, Carl Zeiss shareholders will hold 76% of the emerging corporation and Asclepion-Meditec shareholders will hold 24%.

Ocular Surgery News spoke with Dr. Walter-Gerhard Wrobel, who will assume responsibility for the areas of operations, research and development and quality on the board of the new company. Dr. Wrobel was the general manager of Carl Zeiss Ophthalmic Systems.

We also spoke with Jens Brajer, MBE, who is director of investor relations at Carl Zeiss Meditec, the same position he held with Asclepion.

Dr. Wrobel and Mr. Brajer discussed the philosophy behind the union of the two companies and how they expect the new corporation to be positioned in the worldwide ophthalmic market in the future.

Ocular Surgery News: How long has Carl Zeiss Ophthalmic Systems been interested in merging with Asclepion-Meditec?

Walter-Gerhard Wrobel: We have been considering this merger for almost 10 years, but real serious talks didn’t start until sometime during the summer of 2001.

OSN: How did it become apparent that these two companies would be a match?

Dr. Wrobel: We at Zeiss were one of the market leaders in ophthalmic equipment. We came to the conclusion that we had a very good position in the diagnostic equipment market, especially in the growing market of refractive laser surgery. We concluded we should also be offering the ophthalmic arena a refractive laser, which up to now we have not done. So we were looking at a possible partnership, and it turned out that Asclepion and their product offerings were a perfect match to ours.

OSN: You mentioned that you had been looking at Asclepion for the past 10 years. Were there other companies Carl Zeiss considered merging with?

Dr. Wrobel: Carl Zeiss and Asclepion have been, at times, competitors in the ophthalmic field, but also potential partners. So there was some contact over these past 10 years, but it did not amount to anything until recently. There were other companies Carl Zeiss was considering, but we didn’t look into them with as much detail as we did Asclepion.

OSN: How will the ophthalmic activities of the two companies be integrated?

Dr. Wrobel: We wanted to merge the refractive and ophthalmic sales forces, meaning the vision products from Asclepion-Meditec will be integrated into the Carl Zeiss portfolio. We will also have distributors in some countries. We expect all of this to take place in the next couple of months.

OSN: What other nonophthalmic activities will be combined? Asclepion has products outside the ophthalmic arena.

Dr. Wrobel: Asclepion also offers dental lasers via an original equipment manufacturers deal, known as an OEM partnership. We expect this line to continue and grow. The aesthetic laser line will also be strengthened and brought on track to success.

OSN: How will this merger affect, or be affected by, the recent union between Zeiss and Humphrey?

Dr. Wrobel: Humphrey is a 100% affiliate of Zeiss in Germany, and Humphrey will become an integral part of the new company, Carl Zeiss Meditec. Actually we will now be a company that is more than 50% American. The majority of our employees are located at the Humphrey facilities in Dublin, Calif. So, we are technically a German-American company.

OSN: What new products will the new company be offering? What new products do you have in the works, and where and when will they be available?

Dr. Wrobel: We’ve been offering, for a few months now, the new OCT 3. This is a dedicated instrument for glaucoma diagnosis that has been a tremendous success in the market since we introduced it at the American Academy of Ophthalmology meeting last year. Another new product is the Visucam Light, a new fundus camera that was introduced in Europe in June. It will be very valuable for the independent ophthalmologist, a device that is tougher and basically a standalone system that is very easy to use.

Jens Brajer, MBE: There are several products from Asclepion coming to the new company as well. For instance, we just introduced the CRS Master, the first technology that integrates wavefront sensing and topography. All new products coming from Asclepion’s lab from all the business areas will be part of the new company, Carl Zeiss Meditec.

OSN: The new entity is a public company that will be traded on the Frankfurt Stock Exchange. What will the future of the new company look like on the stock exchange?

Dr. Wrobel: First of all, it will be the biggest company in terms of medical and health care on the “Neuer Markt” of the Frankfurt Stock Exchange. We are going to turn over more than 230 million euros pro forma this year. The new company will be playing an important role at the stock exchange, on the Neuer Markt.

Mr. Brajer: We look at the company as a prospect candidate for the Nemax 50 Index of the Neuer Markt at the Frankfurt Stock Exchange. It’s really not up to us at the moment to say when this is going to happen, but we will do everything we can to support this.

OSN: Can you explain the rationale behind the agreed valuation ratio between the companies, where Carl Zeiss shareholders are to receive 76% and Asclepion-Meditec shareholders 24% share in the emerging corporation?

Dr. Wrobel: We had an extended diligence phase from December 2001 to February 2002, with independent auditors looking at our business plans and ongoing projects. Based on the discounted cash flow method they came up with this ratio.

OSN: What has been the reaction of the ophthalmic industry to this merger?

Dr. Wrobel: We have had some very positive reactions from our customers. Both companies are well known in the ophthalmic market. It turns out that customers of Zeiss are getting interested in the lasers offered by Asclepion. I also think customers of Asclepion are getting more interested in products from Carl Zeiss. So there was a positive reaction from customers. And the synergy that we expect from the merging of the distribution organizations will be quite a rapid success as well.

OSN: Where does the merger place you in the ophthalmic market in terms of your competitors?

Mr. Brajer: That depends on how you define competitors. The market leader in the whole area of ophthalmology is, without doubt, Alcon. But if you look at the companies offering equipment, then we probably are the largest company in the area of ophthalmic equipment.

For Your Information:

• Dr. Walter-Gerhard Wrobel can be reached at Carl Zeiss Meditec AG, Göschwitzer Str. 51-51, 07745 Jena, Germany; (49) 3641-64-2578; fax: (49) 3641-64-3371; email: wrobel@zeiss.de.
• Jens Brajer, MBE, can be reached at the same address; (49) 3641-220-105; fax: (49) 3641-220-102; e-mail: jb@asclepion.com.