BOTHELL – Two companies specializing in cardiac health equipment, including locally based Quinton Cardiology Systems, are beating with one heart this week after completing their merger.
The formerly separate Quinton and Cardiac Science began operating together as Cardiac Science Corp. last Thursday, a day after shareholders from both companies voted strongly in favor of combining.
The new company is based at Quinton’s former headquarters in Bothell. Its products span a range within the cardiac health field. Quinton was a longtime maker of heart monitoring and stress test systems. Cardiac Science specialized in defibrillators, which can restart the heart during cardiac arrest.
John Hinson, who was chief executive officer for Quinton, is continuing in that position for the merged company. He took over at Quinton after a group of investors bought the faltering company from American Home Products Corp. in 1998 and made it independent again.
“We came here, and the company was losing money and didn’t have a clear focus,” said Hinson, who has since presided over other acquisitions by Quinton, which ended 2004 with a profit. “Now we can take that momentum onto a much larger and global scale. What we have done (with this merger) is exactly what we set out to do five years ago.”
He said the merger adds about 30 jobs to the new company’s Bothell offices.
On the other hand, jobs in Cardiac Science’s former headquarters in Irvine, Calif., will be lost as that facility is closed. A Cardiac Science manufacturing facility in Minnesota also will be closed, while about 50 jobs will be added to Quinton’s manufacturing site in Deerfield, Wis.
Altogether, the combined Cardiac Science Corp. has more than 550 employees and estimated annual revenue of about $160 million. The company’s market value exceeds $240 million.
Alan Robinson, director of research at Delafield Hambrecht Inc. in Seattle, said he has a positive view of the merger.
“Generally, I do think it’s a good idea. Quinton management are quite good at putting together mergers that grow the company in a good way,” said Robinson, who does not hold stock in Cardiac Science Corp., though his firm has an investment banking relationship with the former Quinton and has bought and sold its stock.
He said the two companies are strong in their niches, even against larger competitors. Cardiac Science also brings experience in international distribution, which Quinton lacked, Robinson added.
On the other hand, Cardiac Science finances have concerned some analysts and some of its products haven’t sold as well as hoped.
But Quinton’s managers, who will make up the majority of top executives in the new company, have a history of focusing on growing cash flow, which may help shape up the combined balance sheet, Robinson said.
“The management at Quinton have been fairly consistently delivered what they said they’d deliver,” he said.
After the merger became final, Cardiac Science Corp.’s stock, which trades under CSCX, rose nearly 9 percent in one day. It since has fallen to $10.88 a share, about where the stock started last week.
Hinson said he thinks the potential sales growth for defibrillators and cardiology management tools will help Cardiac Science Corp. succeed.
“The reason for us to exist and our mission is to focus on this market and provide better technology and better service in it,” he said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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