Trex offering to raise $73 million

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Trex Medical of Danbury, CT, is planning a secondary offering of 4.5 million shares of common stock. If the stock sells at Trex's recent share price of around $14, the offering could raise gross proceeds of $72.8 million, including an overallotment

Trex Medical of Danbury, CT, is planning a secondary offering of 4.5 million shares of common stock. If the stock sells at Trex's recent share price of around $14, the offering could raise gross proceeds of $72.8 million, including an overallotment option of 675,000 shares. Following the offering, Trex Medical parent ThermoTrex will own about 69% of Trex's outstanding shares of common stock, down from 79% prior to the offering.

According to documents filed with the Securities and Exchange Commission, Trex plans to use proceeds from the offering for general corporate purposes and to fund future acquisitions. A portion of the proceeds will be used to acquire French dental x-ray and radiography company Trophy Radiologie (SCAN 1/14/98).

Among the risk factors cited in the offering's prospectus was the company's litigation with Fischer Imaging of Denver, which could come to a head this year. Fischer in 1992 filed suit against Trex's Lorad subsidiary, charging that Lorad's StereoGuide prone breast-biopsy system infringes on patents Fischer holds for its own needle-biopsy device (SCAN 4/8/92). Trex reported that as of September 1997 it had recognized aggregate revenues of about $107.1 million from sales of prone systems, of which $34.4 million comes from sales prior to October 1995.

If Fischer's suit is successful, Trex could be liable for treble damages and would not be able to sell StereoGuide without a license from Fischer, according to the SEC documents. ThermoTrex, however, has agreed to compensate Trex for potential damages related to the Fischer lawsuit for products sold prior to October 1995, when ThermoTrex acquired Lorad. Trex expects a trial to begin by September 1998.

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