Dive Brief:
- Merit Medical Systems has struck a deal to buy Cook Medical’s lead management portfolio for about $210 million in cash, the companies said Tuesday.
- The portfolio includes medical devices and accessories used in procedures to remove or replace a pacemaker or an implantable cardioverter-defibrillator lead.
- Merit is predicting the deal will add $40 million to annual sales and strengthen its position in a cardiac intervention market it values at more than $900 million across the U.S., Europe and Asia. The acquisition is expected to close between Oct. 31 and Dec. 31.
Dive Insight:
The transaction brings together active dealmakers. Over the past 10 months, Cook has penned three deals to divest assets, selling ear, nose and throat devices to C2Dx, its reproductive health business to the private equity firm Astorg and obstetrics, doppler monitoring and gynecology surgery products to CooperCompanies.
Merit, meanwhile, has been busy making acquisitions. Over the past 15 months, the medtech company has paid $100 million for dialysis catheters and a sealant system from Angiodynamic, $32.5 million for a catheter system from Bluegrass Vascular Technologies and $105 million for an acid reflux treatment from Endogastric.
Buying the Cook portfolio will expand Merit’s electrophysiology (EP) and cardiac rhythm management (CRM) business. The Cook assets generated around $37 million in revenue last year, Merit said, with the U.S. region and Europe, the Middle East and Africa region each accounting for more than 40% of the sales.
Starting in 2025, Merit expects the expanded business to represent more than $100 million in combined annualized EP and CRM revenue. Merit CEO Fred Lampropoulos called EP and CRM a “fast-growing, high-margin” business in a statement to disclose the deal.
Needham analysts, in a note to investors, said they think the purchase makes sense and is consistent with Merit’s strategy of pursuing tuck-in acquisitions of complementary products. The analysts said the deal is “both financially and strategically attractive.”
Merit’s broader existing cardiac intervention business reported sales of $93.9 million in the second quarter, up 1.5% on a constant currency basis. Joseph Wright, Merit’s president, said on an earnings call with investors that the growth rate was slightly above the high end of the company’s expectations. The growth was primarily driven by “strong sales” of EP and CRM products, Wright said.