AtriCure has entered into a definitive merger agreement under which it will acquire nContact, a privately-held developer of innovative cardiac ablation solutions.
The transaction consists of an upfront payment of approximately 3.7 million shares of AtriCure common stock, valued at US$24.60 per share, and approximately US$8m in cash, subject to closing adjustments.
The transaction also includes up to US$50m in additional contingent consideration based on completion of enrollment of the CONVERGE Investigational Device Exemption (IDE) trial and Premarket Approval (PMA) from the US Food and Drug Administration. Additionally, nContact shareholders are entitled to additional sales-based contingent consideration on revenue in excess of an annual growth rate of greater than 25% until 2019, paid in either cash or AtriCure common stock, or a combination of both.
“nContact is an excellent strategic addition to AtriCure, as it expands and strengthens our presence in the atrial fibrillation market. We expect the combined entity to provide improved market access and additional collaboration opportunities with cardiac surgeons and electrophysiologists,” said Mike Carrel, president and chief executive officer of AtriCure. “We are excited to be able to offer this therapy to our combined customer base, further the CONVERGE IDE trial, and continue our mission to grow the market with new solutions.”
The transaction will combine two companies committed to solving the challenges associated with the most serious forms of atrial fibrillation and, according to a joint press release, is expected to:
- Expand AtriCure’s addressable market with the addition of a proven technology that treats an under-served population of patients as well as expand AtriCure’s customer account base;
- Complement and expand AtriCure’s current product portfolio and minimally invasive intellectual property portfolio;
- Enhance AtriCure’s commitment to clinical science with the CONVERGE IDE clinical trial;
- Accelerate and sustain AtriCure’s revenue growth rate;
- Drive continued margin expansion and operating leverage opportunities.
Subject to customary closing conditions, the transaction is expected to close in the next several weeks.