SurModics Acquires Creagh Medical, a Developer and Manufacturer of Balloon Catheters
November 20 2015 - 8:00AM
Business Wire
- Accelerates strategic transformation
into a whole-product solutions provider
- Significantly advances company’s
drug-coated balloon development and manufacturing
capabilities
- Expands pipeline of product
development opportunities
SurModics, Inc. (Nasdaq: SRDX), a leading provider of medical
device and in vitro diagnostic technologies, today announced it has
acquired Creagh Medical Ltd., an innovative developer and
manufacturer of percutaneous transluminal angioplasty (PTA) balloon
catheters. The acquisition is a major step forward in SurModics’
strategy to transform its Medical Device business from being a
provider of coating technologies, to offering whole-product
solutions to medical device customers in the large and growing
global interventional vascular market.
“We are excited about the acquisition of Creagh Medical and the
strategic fit of its balloon catheter design and development, and
manufacturing capabilities, which are critical to our
transformation into a whole-product solutions provider,” said Gary
Maharaj, president and chief executive officer, SurModics. “We are
disciplined in our approach for acquisitions, recognizing that
these investments must align with our strategic vision and
accelerate our transformation. Creagh Medical’s capabilities are a
strategic complement to our proven core technology expertise, and
we’re confident this acquisition will contribute to our becoming a
world-class device innovator, developer and manufacturer.”
Creagh Medical is in Ballinasloe, Ireland, ideally located
between the Galway and Athlone medical device hubs. The company was
established in 2006 with significant investment by USCI Japan to
establish a state-of-the-art facility equipped for medical device
research, development and manufacturing from resin to finished
catheters. Following a successful management buyout in 2009, and
with support from Enterprise Ireland, Creagh Medical refocused the
business on developing market leading PTA product platforms, many
of which have been cleared for commercial sale by regulatory
authorities in Europe, the United States and Japan. Given
SurModics’ leadership in coating technologies and current
drug-coated balloon program, the combined organization will have
the capability to support customers from concept to
commercialization, including turn-key manufacturing of innovative
whole-product solutions. Tom Greaney, current CEO of Creagh
Medical, is joining the SurModics executive leadership team,
reporting to Maharaj, and will continue to lead the company’s
Ireland-based operations.
“We are delighted to be able to combine our world-class balloon
catheter development and manufacturing expertise with SurModics,
which leads the world in surface modification technologies,” said
Greaney. “Our capabilities are a great strategic fit for the
company, strengthening its position as a valued partner to
industry-leading medical device manufacturers.”
SurModics acquired Creagh Medical for €30 million (approx. US$32
million), including an upfront payment of €18 million, and up to
€12 million based on achievement of revenue and value-creating
operational milestones. Other terms of the agreement were not
disclosed. The Creagh Medical business is expected to generate $3.5
million to $4 million of revenue for SurModics in fiscal year 2016.
The acquisition will be dilutive on a GAAP and adjusted earnings
per share basis in SurModics’ fiscal year 2016 and accretive on an
adjusted earnings per share basis in fiscal year 2017.
SurModics plans to provide updated guidance for full fiscal year
2016 by the end of the first quarter. This will allow time to
revise the company’s fiscal year 2016 operating plan to include
Creagh Medical. When SurModics announces guidance it will report
both GAAP and adjusted earnings per share to reflect the
amortization, contingent consideration accretion, due diligence,
transaction and other integration costs.
About Creagh Medical Ltd.
Creagh Medical Ltd. is dedicated to providing innovative,
efficient and cost-effective design and manufacture of high-quality
PTA balloon catheters to meet the needs of medical device
customers. Established in 2006 in the west of Ireland, the heart of
the Irish medical device industry, the company attracts some of the
world’s most skilled and talented resources, with extensive medical
device experience ranging from polymer science, mechanical design,
and product design engineering. Creagh Medical’s facility is
purpose-built and equipped to the highest standard with all
catheter technologies on site. Since 2006, the company has
continued to grow its technical and product capability with PTA
products approved throughout the world, including Europe, the
United States, and Japan. With these resources, the company is
uniquely positioned to offer a total solutions approach from
product design and development, through in-house extrusion, balloon
forming, top-assembly, packaging and regulatory capabilities to
approved products for exclusive distribution.
About SurModics, Inc.
SurModics partners with the world's leading and emerging
medical device, diagnostic and life sciences companies to develop
and commercialize innovative products designed to improve lives by
enabling the detection and treatment of disease. SurModics’ mission
is to be a trusted partner to our customers by providing the most
advanced surface modification technologies and in
vitro diagnostic chemical components that help enhance the
well-being of patients. The company’s core offerings include
surface modification coating technologies that impart lubricity,
prohealing and biocompatibility characteristics and components
for in vitro diagnostic test kits and
microarrays. SurModics’ strategy is to build on the product
and technical leadership within these fields, and expand the core
offerings to generate opportunities for longer term sustained
growth. SurModics is headquartered in Eden Prairie,
Minnesota. For more information about the company, visit
www.surmodics.com. The content of SurModics’ website is not part of
this press release or part of any filings that the company makes
with the SEC.
Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements.
Statements that are not historical or current facts, including
statements about the beliefs and expectations regarding the impact
of the acquisition on the Company’s financial performance, and the
expected benefits of the acquisition, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties, and important factors could cause actual results to
differ materially from those anticipated, including (1) our
ability to successfully integrate Creagh Medical, including its
employees, products and technology content, into our business,
(2) our ability to successfully develop, obtain regulatory
approval for, and commercialize our proprietary products, including
the products acquired from Creagh Medical, (3) possible
adverse market conditions and possible adverse impacts on our
business operations and financial results, and (4) other
factors identified under “Risk Factors” in Part I, Item 1A of our
Annual Report on Form 10-K for the fiscal year ended September 30,
2014, and updated in our subsequent reports filed with the SEC.
These reports are available in the Investors section of our website
at www.surmodics.com and at the SEC website at www.sec.gov.
Forward-looking statements speak only as of the date they are made,
and we undertake no obligation to update them in light of new
information or future events.
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version on businesswire.com: http://www.businesswire.com/news/home/20151120005322/en/
SurModics, Inc.Andy LaFrence, 952-500-7000Vice President of
Finance and Chief Financial Officer
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