Kirschner to sell Chick Medical Products

November 07, 1990|By David Conn

Timonium-based Kirschner Medical Corp., beset by lawsuits and losses in the last year, announced yesterday that it has agreed to sell its unprofitable Chick Medical Products division in Greenwood, S.C., for about $9 million, less than half what it paid for the company 2 1/2 years ago.

But Kirschner, which makes orthopedic supplies and equipment, still retains the Marlow, Okla., facilities of All Orthopedic Appliances, which was part of the Chick Medical acquisition in 1988.

The sale of Chick, which produces surgical tables and lights for operating rooms, to MIDMARK Corp. of Versailles, Ohio, also includes a $2.2 million option for MIDMARK to buy Chick's 80,000-square-foot plant in one year.

In the meantime, MIDMARK will lease the Ohio plant, which has about 130 employees, Kirschner said.

Kirschner bought Chick and All Orthopedic Appliances in April 1988 from Professional Medical Products Inc. for $18.9 million in cash and stock.

Kirschner is still saddled with debt from the original purchase and a resulting financing agreement with Maryland National Bank.

Soon after the purchase, nearly two-thirds of Chick's sales staff defected to the U.S. arm of a French

competitor.

Kirschner was sued by, and countersued, the competitor, and later found itself tangled up in shareholder lawsuits accusing the company of misrepresenting its financial condition.

Kirschner executives have denied the allegations.

The company, which posted a profit of $1.5 million in 1988, soon saw its earnings deteriorate. Kirschner reported a $14.2 million loss last year.

The company's stock price, meanwhile, reflected the earnings decline. The stock, which traded above $20 a share two years ago, closed yesterday at $8.75, down 75 cents.

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