Dive Brief:
- Zoll said Monday it has agreed to acquire Vyaire Medical’s ventilator business after winning an auction of the assets.
- Vyaire held a virtual auction as part of its Chapter 11 bankruptcy protection process. Zoll offered $37 million in cash and agreed to take on certain liabilities, beating Vent Portfolio’s back-up bid of $24.2 million, according to a court document from the U.S. Bankruptcy Court for the District of Delaware.
- Buying the assets will expand a portfolio of respiratory assets that Zoll began to build through its acquisition of Impact Instrumentation’s portable critical care ventilators in 2014.
Dive Insight:
Vyaire filed for Chapter 11 bankruptcy protection in June after “below-plan performance” in the first half of the financial year hindered efforts to refinance debt. As part of the process, the company sought buyers for its respiratory diagnostics and ventilation businesses. Zoll made the winning bid for the ventilation unit at a virtual auction last week. A hearing to approve the deal is scheduled for Monday.
The deal covers a business centered around a manufacturing and repair facility in Palm Springs, California, and a R&D site in Irvine, California, according to court documents. Vyaire also works with third-party manufacturing facilities in countries including Mexico and Malaysia.
When Vyaire filed for bankruptcy protection, the company said ventilation revenue jumped from $215 million in 2019 to $620 million in 2020, but growth “tailed off as the pandemic waned,” the filing stated. Ventilation revenue fell to $156 million in 2023.
Vyaire cited “COVID-19 related overinvestment in the sector and slowing sales” as issues it faced as the crisis eased. The Palm Springs facility was operating at 20% of capacity when Vyaire filed for bankruptcy. At the same time, Vyaire said it faced rising costs, including an eight-fold increase in the price of medical grade resin.
The company also said it lost more than 10% of its share of the sub-acute ventilation market because of increased competition and “business challenges” that led some customers to favor its rivals.
Vyaire sells its Bellavista ventillator product line in the acute marketplace. The 3100 product category, plus certain Bellavista and Fabian devices, serve the neonatal market. Portable ventilators in Vyaire’s LTV and ReVel series serve the non-acute market. Vyaire said it makes 47% of its ventilation revenue outside the U.S.
At the start of the Chapter 11 process, Vyaire said it would seek both separate bids for its ventilation and respiratory diagnostics businesses and offers from companies interested in buying all the assets. The company sold its consumables business to SunMed for around $310 million in 2023.