Merit Medical Systems has announced that it has entered into a stock purchase agreement to acquire Thomas Medical Products from GE Healthcare in an all-cash transaction valued at approximately US$167 million, subject to customary post-closing adjustments.
Thomas Medical designs and manufactures catheter-based vascular access delivery devices for diagnostic and therapeutic procedures in electrophysiology, cardiac rhythm management, interventional cardiology and interventional radiology applications, primarily on an original equipment manufacturer (OEM) basis. Merit believes Thomas Medical’s products are recognised as “gold standard” by many of the leading cardiac rhythm management and electrophysiology market participants. Merit currently anticipates that at the end of 2012 Thomas Medical will generate revenues of approximately US$37 million and have gross and operating margins of approximately 55% and 44%, respectively, on a pro forma basis.
“We believe this transaction will help expand our market presence into new product categories, particularly in interventional cardiology,” said Fred P Lampropoulos, chairman and CEO of Merit. “A majority of cardiac rhythm access procedures utilise products of the nature manufactured by Thomas Medical. We believe substantial international expansion opportunities exist, especially in China, Japan, Russia and the Gulf States, as well as significant new product development opportunities based on know-how and existing intellectual property.”
“In addition, Thomas Medical has a number of existing electrophysiology products that are distributed by the larger medical device companies, as well as other electrophysiology products being developed,” Lampropoulos continued. “We believe this segment of the business, which likewise represents potential expansion into new product categories, has the potential to be a driver of substantial future growth.”
Tom Gentile, president and CEO of GE Healthcare’s Healthcare Systems division, said, “We are confident this transaction will provide Thomas Medical new capabilities to maximise its opportunities in the single-use vascular access product space and enable GE Healthcare’s Cardiovascular segment to remain focused on its core strengths as a provider of total Integrated Cardiology Lab solutions. In addition, we believe Merit Medical will bring a huge amount of expertise in these segments to take Thomas Medical to the next level.”
Merit currently anticipates that the proposed transaction will close prior to 31 December 2012.