Medtronic to buy ATS Medical for $370 million

April 29, 2010 by MedCity News

Medtronic Inc. agrees to acquire Minneapolis peer ATS Medical Inc. for $370 million in cash and debt.

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By Thomas Lee

Medtronic Inc. (NYSE:MDT) plans to acquire ATS Medical Inc. (NSDQ:ATSI) for $370 million in cash and debt, a move that further expands the medical device giant’s foray into the fast-growing market for products that treat structural heart disease.

Fridley, Minn.-based Medtronic will pay $4 for each share of ATS Medical, headquartered in Plymouth, Minn.

“The acquisition of ATS Medical will further strengthen our CardioVascular business,” Scott Ward, Medtronic senior vice president who runs the company’s cardiovascular business, said in a statement. “ATS is an innovative and successful company that is well respected by cardiac surgeons throughout the world.”

Cardiovascular technology, including replacement heart valves and atrial fibrillation therapies, is one of Medtronic’s fastest growing units. In fiscal 2009, cardiovascular revenue jumped 15 percent to $2.44 billion from the previous year.

The company has also aggressively pursued the market through acquisitions. Last year, Medtronic spent more than $1 billion to acquire CoreValve Inc. of Irvine, Calif., and Ventor Technologies Ltd. in Israel. Both companies are developing ways to implant replacement heart valves through catheters snaked up the groin instead of via open-heart surgery.

In 2008, Medtronic acquired CryoCath Technologies Inc. for about $380 million. The Canadian company makes catheters that can deliver sub-zero temperatures to the heart. The technology restores normal electrical signals by freezing the tissue or pathways behind the irregular quivering. Last month, Medtronic said the first results from its clinical trials of CryoCath technology showed the therapy was far more effective at treating atrial fibrillation than drugs.

The companies estimates the combined market size for heart valves and atrial fibrillation to be $4 billion.

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