Merit Medical Systems has announced that it recently signed a definitive asset purchase agreement to purchase Cook Medical’s lead management portfolio for a total cash consideration of approximately US$210 million.
Merit expects to fund the transaction through a combination of cash on hand and borrowings under its long-term credit facility, as stated in a company press release. The closing of the proposed transaction is expected to occur during the fourth quarter of 2024, subject to the receipt or waiver—in accordance with the provisions of the asset purchase agreement—of certain closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing conditions.
Cook’s lead management business has 34 years of operating history and provides a comprehensive end-to-end product portfolio of medical devices and accessories used in lead management procedures for patients who need a pacemaker or an implantable cardioverter-defibrillator (ICD) lead removed or replaced, the release notes.
“This transaction is consistent with our Continued Growth Initiatives (CGI) and positions Merit to offer clinicians an increasingly comprehensive set of solutions to support cardiac intervention patients, from diagnosis, to therapy and intervention, to post-procedure care,” said Fred P Lampropoulos, Merit’s chairman and chief executive officer. “We believe this transaction will strengthen our fast-growing, high-margin electrophysiology and CRM [Cardiac Rhythm Management] business with the addition of differentiated products and an established commercial infrastructure. We believe the transaction will enhance our position in the cardiac intervention market, which we estimate represents an annual addressable opportunity of more than US$900 million in the USA, EMEA [Europe, Middle East and Africa] and APAC [Asia-Pacific] regions. Specifically, beginning in fiscal year 2025, the addition of Cook’s lead management business positions Merit to represent more than US$100 million in combined annualised electrophysiology and cardiac rhythm management revenue serving the global cardiac intervention market.
“We have updated our full-year 2024 financial guidance to include the projected impact of this acquisition from a prospective closing date of 31 October 2024 to 31 December 2024 and, importantly, we have reaffirmed our updated full-year 2024 financial guidance previously issued on 1 August 2024. While we anticipate the transaction will be modestly dilutive to our full-year 2024 non-GAAP [Generally Accepted Accounting Principles] profitability given the partial-year contribution, we believe the financial profile of this acquisition is very attractive and is consistent with our goal of delivering sustainable, constant currency growth, improving profitability and strong free cash flow generation. We look forward to discussing this acquisition and our updated outlook for 2024 on our third quarter earnings report on 30 October 2024.”
