A Medical Device Daily
Possis Medical (Minneapolis), a developer of devices for the cardiovascular and vascular treatment markets, reported closing a $2.5 million equity investment in Rafael Medical Technologies (Dover, Delaware).
The deal gives Possis 15% ownership in Rafael Medical with a three-year option to purchase the company, together with an obligation to provide up to $1.5 million of secured debt financing and one seat on Rafael’s board of directors.
Rafael Medical is developing its SafeFlo inferior vena cava (IVC) filter. It is estimated that by 2010, the U.S. market for IVC filters will total nearly $200 million.
The IVC is the large vein that carries de-oxygenated blood from the lower body back to the heart and then to the lungs for re-oxygenation. In certain individuals, the formation of blood clots in the deep veins of the legs, a condition known as deep vein thrombosis (DVT), can lead to the migration of blood clots to the lungs causing a pulmonary embolism (PE), an often fatal condition.
The U.S. SafeFlo IVC filter is a minimally invasive and retrievable filter designed to prevent the migration of thrombus to the lungs and the potentially devastating effects of PE.
“More than 600,000 people suffer from DVT annually in the U.S., and the most feared complication of DVT is PE,” said Robert Dutcher, chairman, president/CEO of Possis. “The retrievable design of the SafeFlo filter allows it to be placed in the patient temporarily and then later removed when the risk of a PE has passed. This device is synergistic with our strategy to expand the use of our industry-leading AngioJet thrombectomy system to treat both DVT and PE thrombus. The combination of the SafeFlo filter and AngioJet thrombectomy may revolutionize the treatment of DVT and prevention of PE.”
Rafael is conducting a clinical trial of the SafeFlo filter at multiple sites in the U.S. and Europe; a 510(k) submission to the FDA is expected within 12 to 18 months.
The purchase option may be exercised by Possis at any time, at the discretion of Possis, prior to the earlier of 60 days after Rafael receives FDA marketing clearance, or Nov. 29, 2009.
If Possis determines to exercise the option, it will pay Rafael Medical shareholders an initial purchase price of $12 million in cash, less any debt outstanding, and will be obligated to make earn-out payments based on a multiple of revenue generated from the SafeFlo IVC filter during the three years commencing six months after closing of the transaction. Total payments, including the $2.5 million initial equity investment, will not exceed $54 million.
In other dealmaking activity: Datasul (Joinville, Brazil), a company that offers software integrated solutions to corporate clients, reported the acquisition of Informenge (Sao Paulo, Brazil), a management software solutions provider for healthcare, such as healthcare insurance companies, hospitals, medical offices, laboratories, diagnostic imaging centers and pharmacies.
In the last 12 months, Informenge has attained about R$5 million in gross revenues. It also has a current portfolio of clients composed of more than 50 companies and 100 active accounts. The value of the acquisition of 100% of its shares will be funded by Datasul’s cash position and will amount to five times the value of the adjusted EBITDA of Informenge for the current exercise ending Dec. 31, as per contractual terms.
According to Jorge Steffens, Datasul’s CEO, “Since we are aiming at complementary offerings, the Informenge solutions will evolve and the company will become a Datasul business unit. We are acquiring a company that complements our current offering to the health industry and strengthens our market footprint. With the acquisition, Datasul said it now manages about 7 million lives with Datasul Health and Informenge software solutions.