dj Orthopedics Completes Acquisition of Aircast Incorporated

dj Orthopedics Inc. (NYSE:DJO), San, Diego, California, closed its acquisition of Aircast Incorporated on April 7. The acquisition first was announced on February 27, 2006. dj Orthopedics acquired Aircast from its shareholders, including majority owner Tailwind Capital, for approximately $290 million in cash.

"We are very pleased to complete our acquisition of Aircast and begin the exciting work ahead of us," said Les Cross, president and chief executive officer of dj Orthopedics. "We will now turn our focus to the rollout of the combined organization's sales strategies and on the timely integration of Aircast's manufacturing and administration functions.

"On the sales side, we have the opportunity to leverage the strength of both the DonJoy and Aircast brands in the US and in Europe," Cross continued. "Aircast's products are complementary to ours and the distribution channel synergies for these two companies should create exciting cross-selling opportunities between DonJoy and Aircast products by the combined efforts of both sales teams. While we are known as a leader in knee bracing and Aircast is known as a leader in ankle bracing, the acquisition also complements and strengthens our existing franchises in fracture boots and in cold therapy products. We are also very excited about our new sales opportunities with Aircast's VenaFlow® vascular system for the hospital-based prevention of deep vein thrombosis after surgery.

"On the integration front, we will soon begin to relocate some of Aircast's administrative functions from their headquarters in New Jersey to our headquarters in Vista, California, which will begin to generate domestic operating expense synergies," Cross said. "Also, we will soon begin relocating certain Aircast manufacturing operations into available capacity that we have at our award-winning production facility in Mexico. The expansion of this facility in Mexico is proceeding according to plan and should be completed by late summer, allowing us to enter the final stage of the manufacturing integration. With less than 200 SKUs in the Aircast portfolio, the integration should be complete by the end of 2006 and represent fairly low risk for us."

Cross continued, "As announced previously, we continue to believe that the full integration of Aircast's business will be accomplished in six to nine months, and we therefore are on target to realize the full annualized benefit of $15 to $20 million in integration synergies in 2007. We are pleased to report that the syndication of our term loan financing for the acquisition was met with overwhelming response, permitting us to lock in a very favorable rate of LIBOR plus 1.5 percent for our new $350 million, seven-year term loan. The size of the term loan was reduced from our original expectations due to our strong cash flow during the period since we announced the acquisition. We plan to discuss additional information regarding our expectations for the remainder of 2006 during our regularly scheduled first quarter conference call, which should occur later this month."

dj Orthopedics Completes Acquisition of Aircast Incorporated

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dj Orthopedics Completes Acquisition of Aircast Incorporated

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