Levitronix Medical sold for 110 Million US-Dollar
19.09.2011
Another important deal for a company based in Technopark Zurich. Thoratec Corporation has acquired the medical business of Levitronix.
Thoratec Corporation (Nasdaq: THOR), a world leader in device-based mechanical circulatory support therapies to save, support and restore failing hearts, announced that it has acquired the medical business of Levitronix LLC ("Levitronix Medical") for an upfront cash payment of $110 million, as well as potential future cash earnout payments of up to $40 million. This transaction solidifies Thoratec's position as the leading, full-line provider of mechanical circulatory support products for both acute and chronic needs, advancing the company's mission of delivering superior therapies to a broad population of heart failure patients.
The acquisition of Levitronix Medical follows a successful strategic partnership between the two companies. Since 2006, Thoratec has provided distribution and clinical support in the U.S. for the CentriMag® Acute Circulatory Support System, Levitronix Medical's flagship product, under an agreement that was scheduled to expire at the end of 2011. Levitronix Medical and Thoratec have also collaborated on the development of the fully magnetically levitated motor technology employed in the HeartMate® III left ventricular assist system, which is currently in preclinical testing.
"We have enjoyed a very productive relationship with Levitronix Medical for a number of years, highlighted by strong growth in U.S. CentriMag sales and the development of an exciting motor technology for HeartMate III," said Gary F. Burbach, Thoratec's President and Chief Executive Officer. "Today's announcement solidifies and expands this strategic relationship, providing Thoratec with full global rights to CentriMag, the cornerstone of our acute surgical product offering, and it broadens our offering to include pediatric mechanical circulatory support through the PediMag® / PediVAS® product line. Additionally, this transaction brings in-house significant intellectual property and expertise in full magnetic levitation, one of the core technological elements of HeartMate III as well as other potential product development opportunities in circulatory and respiratory assist."
Levitronix Medical has built a leadership position in magnetically levitated, bearingless mechanical circulatory support, with current and pipeline programs in cardiac and respiratory assist. CentriMag, Levitronix Medical's lead commercial product, is an extracorporeal, centrifugal flow blood pump used for short-term surgical support. Levitronix Medical also manufactures and markets an acute pediatric surgical support system, known as PediMag in the U.S. and PediVAS in international markets.
"The acquisition of Levitronix Medical represents an important strategic step for Thoratec, enabling us to provide customers with leading mechanical circulatory support solutions for patients in both acute and chronic heart failure, while also bolstering our technological capabilities in the realm of bearingless motor design," Burbach continued. "Moreover, we expect the acquisition to provide Thoratec and its shareholders with important financial benefits, including incremental product sales on a global basis as well as earnings accretion beginning in 2012."
Consideration for the acquisition includes (i) an initial cash payment by Thoratec of $110 million, using cash on hand, and (ii) additional potential cash earnout payments (not to exceed $40 million) tied to the revenue attributable to the products of the acquired business through 2015.
In 2010, Thoratec recorded U.S. CentriMag sales of $17.7 million, an increase of 40% compared to 2009 sales of $12.6 million. In addition to revenue related to its historical agreement with Thoratec, Levitronix Medical recorded $8.0 million in product-related revenue in 2010, consisting of sales of CentriMag in international markets and global sales of PediMag/PediVAS. Going forward, Thoratec will record full worldwide revenues for both products at an improved gross profit margin relative to the previous CentriMag distribution arrangement.
The transaction announced today does not include Levitronix's fluid handling business, which will continue to sell pumps and flowmeters under the Levitronix name.
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