Sarnoff's stake in STI to be sold

November 23, 1994|By Kim Clark | Kim Clark,Sun Staff Writer

The estate of Stanley J. Sarnoff, who founded Survival Technology, Inc., will sell its controlling stake in the Rockville-based syringe maker to fund an endowment for medical students' research.

The company announced yesterday that the estate had hired Merrill Lynch, Pierce, Fenner & Smith Inc. to find a buyer for Dr. Sarnoff's 61 percent stake in Survival Technologies.

Survival's stock jumped 11 percent, or 75 cents, on the news yesterday, finishing the day at $7.50 in Nasdaq trading.

The sale of the stake -- worth about $14 million at yesterday's price -- is expected to take between two and five months, said company Chief Financial Officer Jeffrey W. Church.

Mr. Church said that if Dr. Sarnoff's stake is sold to a single buyer, the 250-employee company, founded in 1969, could lose its independence.

Dr. Sarnoff, who died in 1990, "had two passions. One was this company. The other was the endowment for cardiac research," Mr. Church said.

"Stan always saw STI as a company that would do the sort of things it has been doing, as an independent entity, not aligned with pharmaceutical companies. We'd like to see what Stan had envisioned carried on. But we also have to do what's in the best interest of the shareholders," he said.

If Merrill Lynch decides to sell the estate's stock on the open market, Mr. Church said, the company will probably make a concurrent offering to raise cash for automation of its production plant in St. Louis.

STI reported profits of $2.1 million on sales of $25 million in its fiscal year that ended July 31, compared with earnings of $1.8 million on sales of $30 million the previous year.

He said the company's sales and operating earnings have been depressed by the loss of a major contract and the costs associated with development and marketing of pen-like devices people can use to inject themselves with common drugs.

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