Market Overview

Meson Offers to Acquire InfuSystem for $1.85-$2.00/Share


On July 17, 2013, Ryan J. Morris, the Executive Chairman of the Board of InfuSystem (NYSE: INFU), sent a letter on behalf of Meson LP to the Special Committee of the Board setting forth its good faith indication of interest to acquire InfuSystem for between $1.85 and $2.00 per Share in cash (the “Offer Price”), representing a 28% to 39% premium to the volume-weighted 30 day average closing price of the Shares prior to the May 13 letter setting forth Meson LP's initial indication of interest. Meson LP believes such a transaction represents the best means for shareholders to obtain liquidity for their Shares while maximizing the value of their Shares at a premium. In the letter, Meson LP stated its belief that InfuSystem's growth opportunities present material upside for InfuSystem; however, each of these opportunities is currently pre-revenue and will require significant investments of both time and capital. In addition, InfuSystem faces risks posed by CMS competitive bidding which is legally mandated to have a nation-wide penetration by January 1, 2016. Meson LP expressed its belief that the implied LTM valuation pro forma for: 1) full implementation of the cost reductions currently implemented and planned, 2) elimination of all public reporting costs, and 3) adjusting for the estimated price reductions related to CMS competitive bidding, suggest transaction multiples of approximately 7x EBITDA and 15x EBITDA-Capex. The Offer Price represents a significant premium to current trading levels and comps taking these implied valuation multiples into account. In addition, Meson LP stated its belief that it is not in the best interest of shareholders for InfuSystem to continue as a public company. Given the disproportionate burden of public company reporting (both financial and in terms of management resources), Meson LP believes it is optimal to face the coming reimbursement changes and the business risks associated therewith as a privately held corporation in order to eliminate the public company requirements as well as to afford InfuSystem greater financial flexibility in both the short term and the longer term.


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