PolyMedica Industries Signs Letter of Intent to Acquire Assets of Liberty Medical Supply

Business Wire, August 19, 1996

WOBURN, Mass.--(BUSINESS WIRE)--Aug. 19, 1996--PolyMedica Industries, Inc. (AMEX:PM) today announced that it has signed a letter of intent to acquire the assets of Liberty Medical Supply, Inc., a privately-owned company which distributes diabetes testing supplies, medical products, and educational materials to patients with diabetes. Under the terms of the agreement, the transaction is substantially cash and notes and is valued at approximately $9 million. For the current year Liberty anticipates revenues in excess of $13 million with pretax profit margins exceeding 16 percent.

Steven J. Lee, PolyMedica's Chairman and Chief Executive Officer, said, "We continue to move PolyMedica in the direction of a growing international medical products distribution and manufacturing company, and Liberty fits well into this plan. Liberty has a leading position in its industry, steady historical growth, and it opens an entirely new distribution channel for PolyMedica, providing the opportunity for rapid expansion into the large and receptive diabetic market.

"Liberty also brings to PolyMedica a very strong and experienced senior management team. Mark Libratore, President, and Edward Reilly, Vice President, have over thirty years of combined experience in the medical distribution business, and we look forward to their continued leadership as we move forward.

"This acquisition opens a vast new market for PolyMedica. According to the American Diabetes Association, approximately 13 million people in the United States, or roughly 5 percent of the total population, are afflicted with diabetes. In addition, more than 650,000 new cases are diagnosed each year. Industry experts estimate the worldwide market for diabetes testing supplies alone exceeds $1.5 billion.

"Diabetes is a chronic disease in which the body's metabolism of glucose is ineffective due to inadequate production of insulin. Liberty Medical provides access to more than 200 diabetes-related over-the-counter (OTC) products from a variety of vendors. These products range from consumables, such as reagent strips and lancets, to medical equipment, such as blood glucose monitors.

"Both the advanced wound dressings of PolyMedica and the medical products of Liberty Medical treat patients with chronic health conditions. The synergies of combining our two companies are clear. We will be able to cross-market product lines to take advantage of PolyMedica's substantial strength in the OTC market and Liberty Medical's expertise in mail order diabetic supplies.

"Furthermore, our strong working capital position together with new marketing initiatives should enable both companies to accelerate their growth. We are confident that Liberty will demonstrate the effectiveness of our strategic commitment to expand PolyMedica's marketing capabilities by making strategic acquisitions." Mr. Lee concluded.

PolyMedica Industries, Inc. is a medical products distribution and manufacturing company with facilities in the United States and the United Kingdom.

This press release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially as a result of various factors, including those discussed in the Company's Forms 10-K and 10-Q on file with the Securities and Exchange Commission.

CONTACT: PolyMedica Industries, Inc. OR Sitrick And Company

Steven J. Lee Jody Martin

Chairman and Chief Executive Officer (310) 788-2850

(617) 933-2020 Anne George

(212) 788-2850