Graham-Field Says Stock Merger is Both Synergistic and Accretive to Earnings

    ATLANTA, Sept. 8 /PRNewswire/ -- Graham-Field Health Products, Inc.
(NYSE: GFI), a manufacturer and supplier of healthcare products, announced
today that it has entered into an Agreement and Plan of Merger to acquire
Fuqua Enterprises, Inc. (NYSE: FQE), for approximately $166 million in Graham-
Field common stock and the assumption of debt.  Fuqua is one of the leading
manufacturers of durable medical equipment and furnishings in the United
States, marketing a broad range of products to the long-term, home health and
acute care segments of the healthcare industry.  Fuqua's medical products
business was formed through the acquisitions of three businesses:  Basic
American Medical Products, a leading manufacturer and supplier of beds and
patient room furnishings to the long-term care industry; Lumex Medical
Products, a leading manufacturer and supplier of patient aids, specialty
seating products, bathroom safety products and durable medical products to the
home healthcare industry; and Prism Enterprises, which produces heat and cold
packs as well as obstetrical vacuum pumps.  Fuqua also operates a leather
tanning business under the name Irving Tanning, which supplies finished
leather to leather product manufacturers both domestically and
internationally.  Graham-Field announced that while the leather tanning
business produces significant profits and strong cash flows and has an
excellent management team, Graham-Field will continue to concentrate in its
area of expertise and focus in the medical products industry.  Although
Graham-Field considers the leather tanning business a valuable asset, it will
explore strategic alternatives for the leather tanning business.
    In the merger, stockholders of Fuqua will receive 2.1 shares of Graham-
Field common stock in a tax-free exchange for each share of common stock of
Fuqua.  The exchange ratio is subject to upward adjustment in the event that
Graham-Field's average stock price for the 10-day period ending two days prior
to the merger falls below $13.57, and to downward adjustment in the event that
the average stock price exceeds $17.62.  Accordingly, Fuqua stockholders are
assured of receiving Graham-Field stock valued at not less than $28.50 nor
more than $37.00 in exchange for each Fuqua share.  There are currently
4,482,709 shares of common stock of Fuqua outstanding.  Graham-Field will also
assume approximately $55 million of debt in the merger.  Graham-Field will
account for the transaction as a purchase.
    The closing of the transaction, which is currently anticipated for
December 1997, is subject to customary conditions, including approval by the
stockholders of both Graham-Field and Fuqua and the receipt of all necessary
governmental and regulatory approvals.  The principal stockholders of Fuqua
which own approximately 46% of the outstanding shares (including the Fuqua
family which owns 32%) have entered into voting agreements with Graham-Field
pursuant to which they have agreed to vote their shares in favor of the
merger.  Graham-Field stockholders owning shares representing approximately
37% of the outstanding voting power have entered into similar voting
agreements with Fuqua.  Both companies expect to mail a joint proxy statement/
prospectus to their stockholders following Securities and Exchange Commission
clearance and hold special stockholders' meetings to approve the transaction
later this year.
    The merger will position Graham-Field as one of the leading suppliers of
durable medical products in the healthcare industry.  Graham-Field's
distribution network and advanced technology systems will provide significant
growth opportunities for Fuqua's proven manufacturing capabilities and well-
established product lines.  With a long history of providing customers with
quality healthcare products, the Basic American, Lumex and Prism names are
established brands representing leading names to long-term, home health and
acute care customers.  Fuqua is among the leading suppliers of many of its
product lines, including long-term care medical beds, specialty seating
products, bathroom safety products, vacuum pumps and heat and cold packs.
Basic American is one of the leading single source providers of patient room
furnishings in the United States.  Integration and cross-selling opportunities
between the companies will present significant growth opportunities for
Graham-Field.  Graham-Field will be able to use existing relationships of
Fuqua to cross-sell products to long-term care providers, a virtually untapped
marketplace for Graham-Field.
    Graham-Field, based in Hauppauge, New York, is a low-cost provider of over
23,000 medical and surgical products.  Graham-Field's products are distributed
through a network of approximately 18,500 dealers and other customers in North
America.  Graham-Field also markets and distributes products throughout
Europe, Central and South America and Asia.  Graham-Field's state-of-the-art
distribution system enables large customers to consolidate product purchasing
through a single source, increasing efficiency while reducing costs to its
customers.  Graham-Field has acquired 19 companies since 1981.  Most recently,
it acquired Medical Supplies of America in August 1997, LaBac Systems in June
1997, Kuschall of America in March 1997, Motion 2000 in February 1997 and
Everest & Jennings in November 1996.
    According to Graham-Field Chairman and Chief Executive Officer Irwin
Selinger, "The strategic combination of Graham-Field and Fuqua will position
the combined enterprise as a leading provider of durable medical equipment
products by significantly expanding our presence with long-term care providers
and solidifying our strong position in the home healthcare industry.  The
acquisition is accretive to earnings and strengthens our balance sheet.
Equally important, there are a variety of synergies that will reduce costs and
help us to service our customers even more efficiently."
    Selinger explained that Graham-Field's strategy of having the broadest
product line and the most technologically advanced distribution systems has
resulted in its strong growth in the rapidly changing healthcare business.
"Fuqua broadens Graham-Field's product line, enhances our manufacturing
capabilities and significantly expands our presence with long-term care
providers, an untapped area for us."  The merger unites Lumex and Everest &
Jennings, two of the most recognized brands in the durable medical equipment
industry.
    J. Rex Fuqua, the Chairman of the Board of Directors of Fuqua, stated
that, "We believe that the combination of these two companies will prove to be
of major benefit to our stockholders.  The healthcare industry is rapidly
consolidating and customers are seeking providers that can supply all their
medical equipment and supply needs from one source.  This combination creates
a stronger and more formidable company which will be positioned to capitalize
on the strong growth opportunities and the rapidly changing healthcare
industry."  Mr. Fuqua will join the Board of Directors of Graham-Field
following completion of the merger.
    Graham-Field recently reported record revenue and income for the second
quarter ended June 30, 1997.  Revenue climbed 95% to $57.8 million from the
prior year period.  Earnings for the second quarter rose threefold to $2.62
million, or $0.11 a share, from $815,000, or $0.06 a share, a year earlier.
For the six-month period, Graham-Field revenue rose 92% to $109.2 million.
Net income for the six months increased to $4.7 million, or $0.19 a share,
from $1.33 million, or $0.09 a share.  The number of average shares
outstanding rose to 24.3 million from 14.4 million in the previous six-month
period.
    The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements.  This press release contains forward-
looking statements based on current expectations that could be affected by the
risks and uncertainties involved in Graham-Field's and Fuqua's businesses.
These risks and uncertainties include, but are not limited to, the effect of
economic and market conditions, the impact of the consolidation of healthcare
practitioners, the impact of healthcare reform, opportunities for acquisitions
and Graham-Field's ability to effectively integrate acquired companies
(including Fuqua), the acceptance and quality of software products, the
acceptance and ability to manage operations in foreign markets, possible
disruptions in Graham-Field's and Fuqua's computer systems or telephone
systems, possible increases in shipping rates or interruptions in shipping
service, the level and volatility of interest rates and currency values, the
impact of current or pending legislation and regulation, as well as the risks
described from time to time in Graham-Field's and Fuqua's reports to the
Securities and Exchange Commission, which include Graham-Field's and Fuqua's
Annual Report on Form 1O-K for the year ended December 3l, 1996 and Graham-
Field's Registration Statement on Form S-4 dated as of October l8, 1996.
Subsequent written or oral statements attributable to Graham-Field, Fuqua or
persons acting on their behalf are expressly qualified in their entirety by
the cautionary statements in this press release and those in Graham-Field's
and Fuqua's reports previously filed with the Securities and Exchange
Commission.

Link to this page: