Centerpulse (Zurich, Switzerland) reported closing on the previously announced sale of its Carbomedics (Austin, Texas) and Mitroflow (Richmond, British Columbia) mechanical and tissue heart valve businesses to Snia SpA (Milan, Italy), as planned, for about $116 million. The deal value includes $80 million in cash and a subordinated note of $36 million. Centerpulse said that the closing represents its "successful exit" from the cardiac devices market. It now will emphasize its "core sectors" of orthopedics, spine und dental implants, it said. Centerpulse had previously reported that the sale of Carbomedics and Mitroflow would include assignment to Centerpulse of a contractual right to payments of up to $28 million from ATS Medical (Minneapolis, Minnesota). The $80 million cash portion of the sale value will be used to redeem a portion of the credit facility that Centerpulse used to finance the settlement of class-action claims related to faulty hip and knee implants. Snia, a manufacturer and distributor of medical devices with major positions in a variety of cardiovascular sectors said at the time the acquisitions were reported that the Carbomedics buy, in particular, will enhance its U.S. penetration, and the purchases overall will increase global sales of its medical devices to more than $750 million annually. Previous spin-offs of Centerpulse's cardiovascular interests included the sale of its vascular unit, Vascutek Ltd. (Glasgow, Scotland), and Intratherapeutics (St. Paul, Minnesota), for $265 million.
Edwards Lifesciences (Irvine, California), a developer of products and technologies to treat advanced cardiovascular disease, said it has acquired from CardioFocus (Norton, Massachusetts) its surgical business for treating cardiac arrhythmias. The value of the deal was not disclosed. Edwards purchased from CardioFocus the surgical assets to treat cardiac arrhythmias using a proprietary surgical photonic ablation laser technology. In 2001, Edwards entered into an exclusive, multi-year agreement to develop and distribute products from CardioFocus using the photonic ablation technology. Under the terms of the transaction, Edwards has acquired the rights to all CardioFocus products in the field of cardiac ablation to surgically treat cardiac arrhythmias and also retains an equity investment in CardioFocus. Edwards said the transaction is not expected to materially change its net income and EPS expectations for 2003. CardioFocus is a developer of disposable catheter products for treating cardiovascular disorders using diffuse laser energy. The company is retaining its business involving the use of photonic ablation technology to treat atrial fibrillation percutaneously.
QRS Diagnostic (Plymouth, Minnesota), a developer of software-based medical devices contained entirely in computer cards, and Ventracor Ltd. (Sydney, Australia), a developer in medical devices for heart disease, have signed an asset sale agreement for QRS to acquire Ventracor's Cardiac e-Health Division. "The assets QRS has acquired include the intellectual property rights and U.S. and foreign patents for Ventracor's PC-based and pocket-size electrocardiographs as well as a license for an ECG interpretive algorithm," said Spencer Lien, CEO of QRS. "Securing these assets strengthens our lead in the growing market for PC- and PDA-based medical devices." Michael Spooner, Ventracor's managing director and CEO, said, "We can now focus on our VentrAssist artificial heart device, for which we recently received approval to conduct human clinical trials."
Quinton Cardiology (Bothell, Washington) closed on the previously announced acquisition of Burdick (Deerfield, Wisconsin), a cardiology business subsidiary of the Spacelabs Medical division of Instrumentarium, for $24 million, subject to a working capital-related holdback and certain post-closing adjustments, Quinton said. Quinton funded the purchase with about $20 million in cash remaining from its May 2002 initial public offering, plus a partial draw-down on a $12 million bank credit facility. Quinton is a provider of cardiology solutions such as cardiac stress testing systems, cardiac rehabilitation equipment, Holter monitoring devices, ECG management systems and hemodynamic monitoring solutions.
Welch Allyn (Skaneateles Falls, New York), a manufacturer of medical diagnostic equipment, patient monitoring systems, and miniature precision lamps, and Cardio Control NV (Delft, the Netherlands) jointly disclosed that their governing boards have approved a proposed friendly cash offer by Welch Allyn to acquire all outstanding shares of Cardio Control stock for EUR 6 per share. The supervisory board and the management board of Cardio Control said they plan to "fully support" the intended offer and will recommend that shareholders accept the offer when made. Based on the number of outstanding Cardio Control shares and options on shares, the expected offer reflects a value of more than EUR 18 million. "In recent years, we have been able to serve our front-line clinical customers more completely by successfully expanding into new product areas such as diagnostic cardiology," said Bonnie Labosky, group vice president of Welch Allyn, "This transaction furthers Welch Allyn's interest in advancing its worldwide cardio pulmonary and information management market presence. It also allows Welch Allyn to obtain core competencies and technologies to enhance the capture and management of patient clinical data in cost-effective ways."