INTUITIVE SURGICAL AND COMPUTER MOTION
ANNOUNCE MERGER AGREEMENT
SUNNYVALE, CALIF., MARCH 7, 2003 - Intuitive Surgical (NASDAQ: ISRG) and
Computer Motion (NASDAQ: RBOT) today announced they are merging into one company
that combines their strengths in operative surgical robotics, telesurgery, and
operating room integration, to better serve hospitals, doctors and patients.
Under the terms of the definitive merger agreement, Computer Motion's
equity holders would receive 32 percent of the combined company on a fully
diluted basis (including out-of-the-money options and warrants), and Intuitive's
equity holders would receive 68 percent. The merger agreement exchange ratio
formula anticipates that each outstanding share of Computer Motion common stock
would be converted into approximately 0.52 shares of Intuitive common stock. In
the event that Computer Motion's common stock trades at an average of less than
$1.86 per share before the merger, the exchange ratio will be reduced, but shall
in no event be less than approximately 0.48. (See attached table). Under the
merger agreement, it is anticipated that Intuitive will issue an aggregate of
approximately 15.39 million shares, on a net fully diluted basis, in exchange
for all of Computer Motion's outstanding common stock, preferred stock, options
and warrants. The merger is subject to the approval of a majority of the
shareholders of each company and is intended to be a tax-free reorganization. In
addition, Intuitive may provide a bridge loan to Computer Motion to provide
working capital for its operations through the closure period if necessary.
"Both of our companies have made tremendous contributions to medicine by
delivering less-invasive surgery with surgical robotics," said Intuitive
and CEO Lonnie Smith. "By combining our highly complementary technology and
talents, we believe we will be able to provide surgeons and hospitals with the
best possible products and support to serve their patients' needs in minimally
invasive surgery. We believe both the da Vinci(TM) and ZEUS(R) surgical system
platforms will play an important and complementary role in the future of our new
company with each delivering unique benefits to our customers."
"Surgical robotics has delivered on its promise of making surgery less
invasive, shortening recovery times and lessening the trauma for patients, while
providing economic value for our hospital customers," said Robert Duggan,
Chairman and CEO of Computer Motion. "Separately, our companies wouldn't be able
to accomplish for patients and our shareholders what we will be able to
accomplish together. By sharing our complementary technologies in networking,
articulation, control and visualization, we believe we will significantly
strengthen the surgical capabilities of both the da Vinci and ZEUS product
platforms. We look forward to working as one team to enhance the care received
by patients through less-invasive surgery."
The merger will also end a series of long-term patent disputes. "With
these disputes behind us, we can focus the talent and energy of the combined
organization on developing and growing the application of robotics to minimally
invasive surgery; the significant benefits we bring to patients, surgeons, and
medical centers throughout the world; and the operating efficiencies that the
combination will deliver to the bottom line," Mr. Smith concluded.
"This is an important merger for Computer Motion. Eliminating intellectual
property litigation and initiating technology sharing should have a positive
market value. In addition, this merger strengthens our organization's financial
and operational capabilities," Mr. Duggan added.
Intuitive's da Vinci Surgical System is used by surgeons in more than 100
hospitals around the world and provides all the advantages of open surgery while
simultaneously allowing the surgeon to work through small ports of minimally
invasive surgery. Intuitive shipped 60 da Vinci Surgical Systems in 2002 and had
total sales of $72 million.
Computer Motion is a high-tech medical device company evolving surgical
practices to enhance patient lives. Computer Motion plays a significant role in
transitioning the surgical community from current open procedures to endoscopic
procedures that are less painful and traumatic to the patient. Computer Motion's
products include the ZEUS(R) MicroWrist(TM) Robotic Surgical System for
minimally invasive surgical procedures, and the HERMES(R) Control Center, a
centralized system that enables the surgeon to voice control a network of
"smart" medical devices. The AESOP(R) Robotic Endoscope Positioner is the first
surgical robot to be made commercially available in the U.S. The company's
newest product, the SOCRATES(TM) Telecollaboration System, facilitates surgeon
collaboration using video and audio conferencing, shared control of the
endoscopic camera, and video annotation on the surgical image in the operating
The merged company will be traded on NASDAQ under a symbol to be
determined. Mr. Smith will serve as President and CEO and Mr. Duggan will serve
as member of the Board of Directors. Mr. Darrin Uecker will join the new
executive team as Vice President and Chief Technical Officer and will report to
Dr. Gary Guthart, Senior
Vice President of Operations. The company will be headquartered in Sunnyvale,
Calif., with operations in both Sunnyvale and Goleta, Calif.
Intuitive Surgical and Computer Motion will host a joint conference call
to discuss this merger today at 10:00 AM PST. The dial-in numbers for this call
are 877-909-3508 for U.S. calls and 484-630-4228 for International calls. The
passcode is ISRG and the leader is Lonnie Smith.
About Intuitive Surgical
The DA VINCI(TM) Surgical System consists of a surgeon's viewing and control
console having an integrated, high-performance INSITE(TM) 3-D vision system, a
patient-side cart consisting of three robotic arms that position and precisely
maneuver endoscopic instruments and an endoscope, and a variety of articulating
ENDOWRIST(TM) Instruments. By integrating computer-enhanced technology with
surgeons' technical skills, Intuitive believes that its System enables surgeons
to perform better surgery in a manner never before experienced. The DA VINCI
Surgical System seamlessly and directly translates the surgeon's natural hand,
wrist and finger movements on instrument controls at the surgeon's console
outside the patient's body into corresponding micro-movements of the instrument
tips positioned inside the patient through small puncture incisions, or ports.
The company's web site is www.intuitivesurgical.com
About Computer Motion
Computer Motion's products include the ZEUS(R) Surgical System for minimally
invasive surgical procedures, and the HERMES(R) Control Center, a centralized
system that enables the surgeon to voice control a network of "smart" medical
devices. The AESOP(R) Robotic Endoscope Positioner is the first surgical robot
to be made commercially available in the U.S. The company's newest product, the
SOCRATES(TM) Telecollaboration System, facilitates surgeon collaboration using
video and audio conferencing, shared control of the endoscopic camera, and video
annotation on the surgical image in the operating room. The company's products
are CE-Marked for commercial sale in the European Community. The company's Web
site is www.ComputerMotion.com.
# # #
This news release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, including statements about future financial and operating results and
Intuitive's anticipated merger with Computer Motion. You can identify these
forward-looking statements when you see us using words such as "intends,"
"expects," "anticipates," "estimates" and other similar expressions. These
statements are based on current expectations and beliefs and are subject to a
number of risks, uncertainties and assumptions that could cause actual results
to differ materially from those described in the forward-looking statements.
Actual results could differ materially from those expressed or implied in any
forward-looking statements as a result of the certain risks and uncertainties,
including, without limitation, competition and market acceptance of products;
ability to obtain regulatory approvals and third-party reimbursements; ability
to raise additional capital; non-
consummation of the proposed merger; prior to the closing of the proposed
merger, the businesses of Intuitive or Computer Motion suffer due to
uncertainty; that the parties are unable to successfully execute their
integration strategies, or achieve planned synergies; and other factors
described in the Securities and Exchange Commission reports filed by Intuitive
and Computer Motion, including their most recent filings on Form 10-Q. Intuitive
and Computer Motion undertake no obligation to publicly update any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
Additional Information About the Merger and Where to Find It
In connection with Intuitive Surgical's proposed merger with Computer Motion,
Intuitive and Computer Motion intend to file with the SEC a joint proxy
statement/prospectus and other relevant materials.
INVESTORS AND SECURITY HOLDERS OF INTUITIVE AND COMPUTER MOTION ARE URGED TO
READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
INTUITIVE, COMPUTER MOTION AND THE MERGER.
The joint proxy statement/prospectus and other relevant materials (when they
become available), and any other documents filed by Intuitive or Computer Motion
with the SEC, may be obtained free of charge at the SEC's web site at
www.sec.gov. In addition, investors and security holders may obtain free copies
of the documents (when they are available) filed with the SEC by Intuitive by
directing a request to: Intuitive Surgical, Inc., 950 Kifer Road, Sunnyvale, CA
94086, Attn: Sarah Norton. Investors and security holders may obtain free copies
of the documents filed with the SEC by Computer Motion by contacting Computer
Motion, Inc., 130-B Cremona Drive, Goleta, CA 93117, Attn: Dan Tamkin.
Investors and security holders are urged to read the joint proxy
statement/prospectus and the other relevant materials when they become available
before making any voting or investment decision with respect to the merger.
Intuitive, Computer Motion and their respective executive officers and directors
may be deemed to be participants in the solicitation of proxies from the
stockholders of Intuitive and Computer Motion in favor of the merger.
Information about the executive officers and directors of Intuitive and their
ownership of Intuitive common stock is set forth in the proxy statement for
Intuitive's 2002 Annual Meeting of Shareholders, which was filed with the SEC on
April 17, 2002. Information about the executive officers and directors of
Computer Motion and their ownership of Computer Motion common stock is set forth
in the proxy statement for Computer Motion's 2002 Annual Meeting of
Shareholders, which was filed with the SEC on June 19, 2002. Investors and
security holders may obtain more detailed information regarding the direct and
indirect interests of Intuitive, Computer Motion and their respective executive
officers and directors in the merger by reading the joint proxy
statement/prospectus regarding the merger when it becomes available.
ANTICIPATED EXCHANGE RATIO
The number of shares of Intuitive common stock that each share of Computer
Motion common stock will be converted into (the "Exchange Ratio") will be
determined based on the total number of fully diluted shares outstanding for
Intuitive Surgical and Computer Motion immediately prior to consummation of the
merger. Computer Motion's fully diluted share count may vary based upon the
number of shares of common stock into which Computer Motion's preferred stock
will be convertible. This preferred stock conversion ratio will, in turn, vary
inversely based upon the average Computer Motion stock price (the "Average
Computer Motion Stock Price") which will be determined based on closing bid
prices for Computer Motion during a defined pricing period occurring prior to
consummation of the merger.
The table below reflects the anticipated Exchange Ratio based on the number of
fully diluted shares (excluding certain Computer Motion warrants expiring in
2003) currently outstanding for each of Intuitive Surgical and Computer Motion
and a range of assumed Average Computer Motion Stock Prices.
COMPUTER MOTION ANTICIPATED
STOCK PRICE EXCHANGE RATIO
$1.86 and Higher 0.5214
$1.38 and Lower 0.4822