IntriCon Corporation (NASDAQ: IIN), a designer,
developer, manufacturer and distributor of body-worn medical and
electronics devices, announced today that it has acquired Datrix,
Inc., for approximately $2.5 million. Datrix is an Escondido,
Calif.,-based supplier of cardiac diagnostic monitoring (CDM)
devices, sold to leading medical OEMs.
The total purchase price consists of: $1.225 million cash paid
at closing; a $1.05 million subordinated note payable over three
years; and, 75,000 shares of IntriCon common stock (valued at $3.27
as of Aug. 11, 2009). Privately held Datrix is a profitable, cash
flow positive entity with annual revenue of approximately $1.6
million.
In addition to manufacturing Holter monitors—portable devices
for continuously monitoring the electrical activity of the
heart—Datrix also designs and manufactures equipment for
electrocardiograph (ECG) management systems, including a 12
channel, handheld ECG with Wi-Fi capability. The handheld ECG
stores information from as many as 15 patients and wirelessly
transmits their information to a patient management system.
“This is an exciting time for IntriCon. Datrix gains us entry
into what we believe to be an $80 million CDM market,” said Mark S.
Gorder, president and chief executive officer at IntriCon. “It also
creates a platform to expand into other physiological monitoring
markets, and by adding wireless outpatient telemetry capability,
gives us access into the emerging biotelemetry space.
“We intend to leverage Datrix’s cardiac monitoring capabilities
and incorporate IntriCon’s ultra-low-power wireless technology to
develop and launch a new wireless cardiac monitoring device that
will allow more patient comfort and be able to identify
asymptomatic cardiac events including atrial fibrillation, Brady
arrhythmia, tachy arrhythmia and cardiac pause.”
Said Jon Barron, president and CEO of Datrix, “We are pleased to
join forces with IntriCon. In addition to bringing a new CDM device
to market, we believe that we can leverage IntriCon’s proprietary
ultra-low-power nanoDSP™ and wireless nanoLink™ technologies to
improve the mobility and effectiveness of our patient-worn
diagnostic eECG devices.”
Prototype CDM Device to Launch in November
IntriCon and Datrix will unveil a prototype of its new CDM
device, called the Mobile Patient ECG Telemetry System, or MPETS,
at the 2009 American Heart Association Scientific Sessions, Nov.
15-17, in Orlando, Fla. The MPETS is the next generation in
wireless outpatient monitoring using a proven automatic arrhythmia
detection algorithm. Additionally, IntriCon/Datrix will launch a
prototype ECG telemetry acquisition over cell (ETAC) device that
records a patient’s heartbeat when a possible atypical cardiac
event is experienced. The new ETAC event monitor will also have an
optional wireless module.
Said Gorder, “The acquisition of Datrix is the first step in
creating a platform of proprietary, higher margin, physiological
monitoring devices with biotelemetry capability including CDM
devices but also miniature body-worn devices for sleep apnea
diagnosis and other emerging physiological monitoring applications.
Adding biotelemetry capability to these devices makes them more
ambulatory and allows the point of care to shift to less expensive
venues such as clinics and homes. Moreover, Datrix’s work
complements bio-telemetry projects with our strategic partner
Advanced Medical Electronics (AME).”
IntriCon will operate Datrix as a wholly owned subsidiary, with
Datrix’s management team continuing to run the business.
“We’re excited to welcome Datrix into the IntriCon family,” said
Gorder. “This transaction is a stepping stone toward long-term
growth, and lays a foundation for success in achieving our goal of
becoming a leading supplier of proprietary body-worn medical
devices.”
Minneapolis-based, Northland Securities, Inc., acted as
IntriCon’s strategic advisor in the transaction.
Company Closes $11.5 Million in New Credit Facilities
IntriCon also announced it has closed $11.5 million in credit
facilities with Minneapolis-based The PrivateBank. Terms of the
agreements include:
- an $8.0 million revolving credit
facility, with a subfacility for letters of credit, to mature in
three years; and
- a $3.5 million term loan
facility, amortized in quarterly principal installments based on a
three-year repayment schedule.
The $11.5 million in credit facilities includes London Interbank
Offered Rate (LIBOR) interest rate options based on funded debt to
EBITDA.
“The favorable terms of our new credit facilities enhance
IntriCon’s financial flexibility and strengthen the company in both
the short- and long-term. We’re using the facilities to finance our
purchase of Datrix and meet working capital requirements. The fact
that we were able to secure access to capital in today’s
challenging environment, reflects The PrivateBank’s belief in
IntriCon and the exciting growth prospects in the physiological
diagnostic monitoring markets,” concluded Gorder.
About Datrix
Datrix is a leader in ambulatory electrocardiograph (ECG)
recording. The ability of ambulatory ECG recorders, commonly
referred to as Holter recorders, to monitor a patient's ECG both in
and away from the hospital environment make ECG recorders an
indispensable aid for physicians diagnosing heart related problems.
Datrix has been providing both Holter and Event recorders to the
industry for more than a decade. Datrix products have been marketed
worldwide under the Datrix name and many various OEM names. Datrix
is a ISO 9001 certified facility. All products have both CE mark
and 510K approval. To learn more about the company visit:
http://www.ecgrecorder.com/
About IntriCon Corporation
Headquartered in Arden Hills, Minn., IntriCon Corporation
designs, develops and manufactures miniature and micro-miniature
body-worn medical and electronics products. The company is focused
on three key markets: medical, hearing health, and professional
audio and communications. IntriCon has facilities in the United
States, Asia and Europe. The company’s common stock trades under
the symbol “IIN” on the NASDAQ Stock Market. For more information
about IntriCon, visit www.intricon.com.
Forward-Looking Statements
Statements made in this release and in IntriCon’s other public
filings and releases that are not historical facts or that include
forward-looking terminology such as “may”, “will”, “believe”,
“expect”, “should”, “optimistic” or “continue” or the negative
thereof or other variations thereon are “forward-looking
statements” within the meaning of the Securities Exchange Act of
1934, as amended. These forward-looking statements include, without
limitation, statements concerning prospects in the miniature
body-worn device arena, new products, strategic alliances, future
growth and expansion, market fundamentals, future financial
condition and performance, prospects and the positioning of
IntriCon to compete in chosen markets and the Company’s planned
investments in research and development. These forward-looking
statements may be affected by known and unknown risks,
uncertainties and other factors that are beyond IntriCon’s control,
and may cause IntriCon’s actual results, performance or
achievements to differ materially from the results, performance and
achievements expressed or implied in the forward-looking
statements. These risks, uncertainties and factors include, without
limitation, risks related to the current economic crisis, the risk
that IntriCon may not be able to achieve its long-term strategy,
weakening demand for products of the company due to general
economic conditions, risks related to the company’s strategic
alliances and joint venture, possible non-performance of developing
the nanoLink product group and other technological products, the
volume and timing of orders received by the company, changes in the
mix of products sold, competitive pricing pressures, the cost and
availability of electronic components and commodities for the
company’s products, ability to create and market products in a
timely manner, competition by competitors with more resources than
the company, foreign currency risks arising from the company’s
foreign operations, the costs and risks associated with research
and development investments and other risks detailed from time to
time in the company’s filings with the Securities and Exchange
Commission, including the Annual Report on Form 10-K for the year
ended December 31, 2008. The company disclaims any intent or
obligation to publicly update or revise any forward-looking
statements, regardless of whether new information becomes
available, future developments occur or otherwise.
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