Merit Medical purchased DFINE, a company focused on vertebral augmentation and targeted radiofrequency ablation of metastatic spinal tumors.
The two companies began their relationship a few years ago when Merit provided key components to DFINE devices, according to Merit Chairman and CEO Fred P. Lampropoulos. Here are six things to know about the transaction:
1. Merit paid $97.5 million in cash. Wells Fargo led financing, which also included Bank of America, HSBC and U.S. Bank.
2. Last year, DFINE produced $33.4 million in product revenues. Around 75 percent of revenues were generated in the United States.
3. The DFINE product line has 510(k) clearance and CE marking. Their product line includes StabiliT and StabiliT MX and Star Tumor Ablation. DFINE has 100 patents in the United States and internationally.
4. Merit plans to combine its oncology segments, including embolics, microcatheters and biopsy products into a newly-created interventional oncology and spine division. “We believe the restructuring of the sales divisions — cardiovascular, peripheral and IOS — will enable us to devote greater focus on Merit’s broad portfolio of products, align our sales and marketing efforts with Merit’s goal of achieving a more therapeutic and disease state centered product offering and enhance opportunities for future growth,” said Mr. Lampropoulos.
5. The acquisition is expected to be neutral on Merit’s non-GAAP earnings for the balance of 2016 due to business restructuring and consolidation expenses. Merit believes the acquisition will increase the gross margin by around 80 basis points on a non-GAAP basis and 55 points on a GAAP basis.
6. Canaccordd Genuity was Merit’s financial advisor and Piper Jaffray was DFINE’s financial advisor for the transaction.