AGA Medical falls as top shareholder trims stake

May 12, 2010 by MedCity News

AGA Medical Inc.'s stock price falls 6 percent as a top investor, private equity firm Welsh, Carson, Anderson & Stowe trims its stake in the medical device maker.

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By Thomas Lee

Shares of AGA Medical Holdings Inc. (NSDQ:AGAM) fell more than six percent May 11 after its top investor decided to divest a 10th of its holdings in the Plymouth, Minn.-based medical device maker.

Welsh, Carson, Anderson & Stowe, a private equity firm and majority owner of AGA Medical, will disburse 2.4 million shares to its individual shareholders, leaving it with 21.5 million shares, according to documents filed with the Securities and Exchange Commission.

AGA Medical stock closed May 11 at $15.12, down 6.2 percent.

The timing of the divestiture, which comes less than seven months after the company went public, raised some eyebrows on Wall Street.

Since its $199 million stock debut in late October, AGA stock has risen about 10 percent. But the IPO itself was a bit of a disappointment: The company initially priced the offering at $19 to $21 a share and lowered it to $15 to $16 a share, before finally settling on $14.50 per share.

Last week, AGA Medical said it lost $21.2 million, or 42 cents per share, on first-quarter sales of $51.3 million. That compares to a loss of $10.6 million, or 49 cents per share, on sales of $44.4 million during the same period last year.