MicroPort Scientific to Acquire LivaNova's Cardiac Rhythm Management Business for $190 Million to Access $10 Billion Global Market

VCBeat (WeChat ID: vcbeat) has learned, On November 20, 2017, MicroPort Scientific Corporation (hereinafter referred to as “MicroPort”) signed an agreement with LivaNova PLC, announcing that MicroPort would acquire LivaNova’s cardiac rhythm management business for $190 million in cash.

MicroPort is a leading Chinese high-end medical device group, with its business spanning ten major fields: cardiovascular interventional products, orthopedic medical devices, aortic and peripheral vascular interventional products, electrophysiology medical devices, neurointerventional products, cardiac rhythm management products, diabetes and endocrinology medical devices, and surgical instruments. MicroPort currently has more than 200 marketed products, which are sold to over 5,000 hospitals worldwide, covering major markets in Asia-Pacific, Europe, and the Americas. In 2016, MicroPort achieved revenue of USD 390 million.

In 2014, MicroPort Medical and Sorin Group (which had acquired ELA Medical in 2001) signed an agreement to establish a joint venture in China, named Chuangling Cardiac Rhythm Management Medical Devices (Shanghai) Co., Ltd., for the joint research and development, manufacturing, and marketing of cardiac rhythm management devices (including pacemakers, ICDs, and CRT devices). In 2015, Chuangling Cardiac Rhythm Management established China’s first domestically produced cardiac pacemaker production line aligned with advanced international standards.In September 2017, Leadheart Medical announced that its Rega™ Heart Series implantable cardiac pacemaker had officially received approval from the China Food and Drug Administration (CFDA), becoming the first domestically produced cardiac pacemaker in China with internationally advanced quality.

LivaNova is a global medical technology company headquartered in London, United Kingdom, with operations in more than 100 countries and a workforce of over 4,500 employees. The company is dedicated to delivering high-impact solutions for patients, healthcare professionals, and healthcare systems through advanced technologies and breakthrough therapies. LivaNova operates three core business segments: Cardiac Surgery, Neuromodulation, and Rhythm Management, which are respectively managed from Mirandola (Italy), Houston (United States), and Clamart (France).

LivaNova’s cardiac rhythm management business primarily focuses on the research and development, manufacturing, and sales of products for diagnosing, treating, and managing arrhythmias and heart failure. Its main product portfolio includes defibrillators, cardiac resynchronization therapy (CRT) devices, and pacemakers, with over one million units implanted worldwide over the past four decades. In 2016, LivaNova’s cardiac rhythm management business reported net sales of approximately $249 million.

LivaNova’s core manufacturing and sales centers for its cardiac rhythm management business are located in France and Italy; therefore, this acquisition will provide MicroPort with critical resources and production bases in these two key European markets, thereby expanding MicroPort’s business scale in Europe.According to MicroPort, following the completion of this acquisition, the company will cover the global cardiac rhythm management market, valued at approximately $10 billion.

Meanwhile, this acquisition will also help improve the overall operational efficiency of MicroPort’s cardiac rhythm management (CRM) R&D operations in China. As China is home to the world’s largest addressable patient population for treatable conditions, MicroPort can better serve Chinese patients with arrhythmias by accelerating the development of new CRM products. Furthermore, expansion in the Chinese market will further enhance MicroPort’s competitiveness in the global cardiac rhythm management industry.

Therefore, the synergy between overseas R&D and local Chinese R&D will inevitably accelerate the expansion of the company’s cardiac rhythm management business in China, propelling MicroPort to become the leading enterprise in China’s cardiac rhythm management sector.

Dr. Chang Zhaohua, Chairman and CEO of MicroPort Scientific Corporation, stated, “LivaNova’s cardiac rhythm management business operates globally, boasting a robust product portfolio that delivers strong competitiveness in major global markets, along with highly attractive assets and significant growth potential. The strategic alliance between MicroPort and LivaNova leverages MicroPort’s leading position in China and LivaNova’s leadership in cardiac rhythm management in Europe, which will undoubtedly further enhance both parties’ influence in the global market.”

“Meanwhile, LivaNova’s Cardiac Rhythm Management (CRM) business upholds the development philosophy of dedication, innovation, precision, and integrity, which aligns perfectly with MicroPort’s values. We are confident that this partnership will enable both MicroPort and the CRM business to achieve faster, better, and stronger growth on a global scale. This collaboration presents an excellent opportunity for MicroPort; building upon our existing achievements in the cardiac rhythm management market, we will accelerate the development of new CRM products. We will dedicate greater efforts and resources to this business unit to fully unlock and enhance its potential. We warmly welcome the talents from LivaNova’s CRM business to join the MicroPort family.”

Damien McDonald, CEO of LivaNova, stated, “Through the joint venture LeadCare Medical, we have partnered with MicroPort for nearly four years. We appreciate and respect their relentless pursuit of innovation. We believe that MicroPort is the ideal home for our cardiac rhythm management business, enabling it to fully realize its potential. As a globally leading medical device company, MicroPort provides a platform that will sustain the development and rapid growth of the cardiac rhythm management business, offering enhanced opportunities for employees while benefiting physicians and patients worldwide.”

It is reported that MicroPort and LivaNova will enter into a definitive purchase agreement after completing the necessary notifications and engaging in consultations with the works council of LivaNova’s rhythm management business employees as required by law. The closing of the transaction is subject to the execution of the definitive purchase agreement by both parties, receipt of regulatory approvals, and satisfaction of other customary closing conditions. The Company expects the transaction to be completed in the second quarter of 2018.