Merit Medical Systems To Purchase Cook Medical's Lead Management Portfolio In $200M Deal, Seeks To Enhance Its Position In Cardiac Intervention Market

Tuesday, Merit Medical Systems, Inc. MMSI agreed to purchase Cook Medical’s lead management portfolio for cash consideration of approximately $210 million.

Merit expects to fund the transaction through cash on hand and borrowings under its long-term credit facility. The deal is expected to close in the fourth quarter of 2024.

Cook Medical’s lead management business provides a comprehensive end-to-end product portfolio of medical devices and accessories used in lead management procedures for patients who need a pacemaker or an implantable cardioverter-defibrillator (ICD) lead removed or replaced.

“This transaction is consistent with our Continued Growth Initiatives (CGI) and positions Merit to offer clinicians an increasingly comprehensive set of solutions to support cardiac intervention patients, from diagnosis to therapy and intervention, to post-procedure care, ” said Fred Lampropoulos, Merit’s Chairman and CEO.

“We believe this transaction will strengthen our fast-growing, high-margin electrophysiology and CRM business with the addition of differentiated products and an established commercial infrastructure. We believe the transaction will enhance our position in the cardiac intervention market, which we estimate represents an annual addressable opportunity of more than $900 million in the US, EMEA, and APAC regions. Specifically, beginning in fiscal year 2025, the addition of Cook’s lead management business positions Merit to represent more than $100 million in combined annualized electrophysiology and cardiac rhythm management revenue serving the global cardiac intervention market,” Lampropoulos added.

The business generated approximately $37 million in revenue in 2023.

If the proposed transaction is consummated, the assets Merit proposes to acquire from Cook Medical are projected to contribute revenue of $4 million—$6 million for the last three months of fiscal year 2024.

The deal is expected to dilute Merit’s previously forecasted adjusted operating margin, net income, and EPS.

The company updated its 2024 adjusted EPS guidance to $3.25-$3.34, compared to the $3.27-$3.35 expected previously and the consensus of $3.31.

Price Action: MMSI stock closed at $99.64 on Monday.

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