Merit Medical to Acquire Cook Medical's Lead Management Business for $210 Million

Sep 18, 2024 17:51 CST Updated 17:51

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Recently, Merit Medical announced,The Company has agreed to acquire Cook Medical’s guidewire management business for $210 million (approximately RMB 1.5 billion).

Merit Medical expects to fund the transaction through a combination of cash on hand and borrowings under its long-term credit facility. The proposed transaction is expected to close in the fourth quarter of 2024., but subject to the receipt or waiver (as provided in the Asset Purchase Agreement) of certain closing conditions, including approvals under antitrust laws and other customary closing conditions.

It is understood that,Cook Medical's lead management business has 34 years of operational history, providing a comprehensive end-to-end portfolio of medical devices and accessories for lead management procedures in patients requiring the removal or replacement of pacemaker or implantable cardioverter-defibrillator (ICD) leads.

Breakthroughs in Industry Challenges

Cook Medical’s lead management business provides medical devices and accessories for lead management programs.These procedures are performed in patients who require removal or replacement of pacemaker or implantable cardioverter-defibrillator (ICD) leads.

Merit Medical stated,Cook MedicalGenerated approximately $37 million in revenue during the 12-month period ended December 31, 2023.The company expects to contribute $4 million to $6 million in revenue from the expected closing dates between October 31, 2024, and December 31, 2024. During the same period, it anticipates that its non-GAAP operating margin, non-GAAP net income, and non-GAAP earnings per share will be diluted.

If the acquisition is completed,The Company expects that the transaction will have a dilutive impact on GAAP net income and earnings per share in the first full year following the completion of the transaction,and a neutral impact and an incremental impact are expected in the second year.

Merit, headquartered in South Jordan, Utah, expects to finance the transaction through a combination of cash on hand and borrowings under its long-term credit facility. It anticipates closing the deal in the fourth quarter of this year.

Merit Chairman and Chief Executive Officer Fred P. Lampropoulos stated,This transaction will strengthen the company's electrophysiology and cardiac rhythm management businesses.

“We believe the financial profile of this acquisition is highly attractive and aligns with our objectives of achieving sustainable, consistent currency growth, enhancing profitability, and generating strong free cash flow,” said Lampropoulos. “We look forward to discussing this acquisition and our updated outlook for 2024 in our third-quarter earnings report on October 30, 2024.”

Fred P. Lampropoulos believes that thisTransactionThis will strengthen its position in the cardiac intervention market, where the estimated annual potential opportunity exceeds $900 million in the United States, Europe, the Middle East and Africa (EMEA), and the Asia-Pacific region.Specifically, beginning in fiscal year 2025, the expansion of Cook’s leadership-managed business has driven Merit’s annualized total revenue from electrophysiology and cardiac rhythm management to exceed $100 million, serving the global cardiac intervention market.

Cook Medical Previously Sold Its Reproductive Health Business

Cook Medical is a medical device company from Indiana, USA, founded in 1963 by Mr. Bill Cook and his wife. Currently, Cook Medical operates in 135 countries and regions worldwide.The product portfolio primarily comprises vascular interventional and medical surgical products, covering multiple specialties including critical care, endoscopy, otolaryngology/head and neck surgery, reproductive health, general surgery, and urology.Production bases are primarily located in the United States, Europe, and Australia. The company operates six global logistics distribution centers and multiple local warehousing and distribution centers, with a workforce of over 10,000 employees.

In the field of reproductive health,Cook Medical has been deeply engaged in the field for over 40 years, successfully developing products for obstetrics and gynecology, in vitro fertilization (IVF), and assisted reproductive technology (ART).This includes the development of the world’s first needle specifically designed for in vitro fertilization (IVF) treatment, used to transfer IVF embryos into the uterine cavity. Additionally, Microvol™ technology reduces the volume of medium required for transfer.Additionally, the Bakri Postpartum Balloon with Rapid Infusion Kit is used to provide temporary control or reduction of postpartum uterine bleeding when conservative treatment is required.

In addition, over the past few years,Cook Medical’s customers, supply chain, and ways of working have undergone significant changes.To ensure success in the new development phase, its global leadership team implemented a new five-year vision and strategic plan, which was developed based on extensive feedback from customers, employees, and the leadership team.

Public information indicates that, in order to execute its "Five-Year Vision and Strategic Plan," Cook Medical has undertaken several significant initiatives in recent years, including divesting business units and implementing layoffs.

Global Leader in Interventional Radiology and Cardiac Therapies

Merit MedicalEstablished in 1987,Engaged in the development, manufacturing, and distribution of proprietary single-use medical devices for interventional, diagnostic, and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care, and endoscopy.Merit serves customer hospitals worldwide, with a domestic and international sales and clinical support team totaling more than 700 people, and approximately 7,000 employees globally.

It is worth noting that Merit has become a global leader in the fields of interventional radiology and cardiology treatment. After more than thirty years of continuous development and innovation,The company has repeatedly been listed in the "Top 100 Global Medical Device Companies" ranking.

This June,Merit Medical has also partnered with Medtronic to provide a single steerable balloon catheter for the treatment of minimally invasive vertebral compression fractures (VCF).——Kyphon KyphoFlex。

It is understood that the Kyphon KyphoFlex is a steerable, curved catheter used to treat pathological vertebral fractures caused by osteoporosis, cancer, or benign lesions.

Under the agreement between the two parties, Medtronic will be fully responsible for the sales, marketing, and distribution of the product, while Merit Medical will handle the manufacturing of the catheter, including quality and safety control, regulatory affairs, and lifecycle management. This collaboration further deepens the existing partnership between the two companies. Previously,Merit Medical has supplied Medtronic with the Kyphon Xpander inflation device for use in balloon kyphoplasty.

It is reported that,Balloon Kyphoplasty (BKP) is a percutaneous treatment for tumor-related vertebral compression fractures.Designed to restore vertebral height using an orthopedic balloon and correct vertebral compression fractures caused by osteoporosis, cancer, or benign lesions.

This procedure involves introducing a small balloon into the vertebral body via a cannula and inflating it to elevate the collapsed vertebra. Subsequently, the balloon is deflated and removed, and the resulting cavity is controllably filled with bone cement to help form an internal scaffold that stabilizes the fracture.

Merit Medical’s Kyphon KyphoFlex Catheter Enables the Creation of Precise and Controlled Target Cavities in Vertebral Augmentation Procedures.The catheter’s curved design allows for more flexible trajectory adjustment within the vertebral body, thereby achieving more optimal target positioning and complementing Medtronic’s existing bilateral balloon kyphoplasty product portfolio.

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Currently, the interventional cardiology and peripheral vascular device market is experiencing robust growth. Forecasts indicate significant expansion, with the market expected to reach an impressive $41.9003 billion by 2030. This represents a compound annual growth rate (CAGR) of 8.5% from 2021 to 2030.

These figures underscore the growing demand for and importance of interventional cardiology and peripheral vascular devices within the healthcare industry. As technological advancements and medical innovations continue to emerge, the market’s growth trajectory is expected to persist, benefiting patients worldwide.

Merit Medical, as a leading manufacturer of proprietary medical devices for interventional, diagnostic, and therapeutic procedures, holds a pivotal position particularly in the fields of cardiology, radiology, oncology, intensive care, and endoscopy.

Merit Medical stated that this acquisitionCook Medical's related businesses,It will strengthen the company’s electrophysiology and cardiac rhythm management business.So, what surprises will the company bring to the industry next? Device Home will continue to follow closely.

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