Acutus Medical (Nasdaq:AFIB) announced today that it completed the first of two closings in its portfolio sale to Medtronic (NYSE:MDT).
Carlsbad, California–based Acutus announced in April that it entered into a definitive agreement to sell its left-heart access portfolio to Medtronic for $50 million. The company’s left-heart access portfolio includes its AcQCross line of sheath-compatible septal crossing devices, AcQGuide Mini integrated crossing device and sheath, AcQGuide Flex steerable introducer with transseptal dilator and needle and the AcQGuide Vue steerable sheath.
According to a news release, Acutus completed the first closing of the sale yesterday, with Medtronic paying the cash consideration of $50 million at the closing. Acutus will be eligible to receive contingent consideration payments of up to $37 million associated with certain manufacturing and regulatory milestones.
The news comes days after Acutus announced that it launched an expanded suite of left-heart access products following an FDA clearance.
In addition to those payments, Acutus is eligible to receive up to four years of revenue-based earnouts and will continue to commercialize the left-heart access portfolio until it reaches certain milestones to become a supplier to Medtronic.
Acutus also entered into a new, longer-term credit facility with Deerfield Management Company to refinance its existing debt — a term to which the Medtronic sale was subject. The company expects these transactions to fund its long-term growth objectives.
The new debt facility includes investment funds affiliated with Deerfield for $35 million in aggregate principal with a maturity date of June 30, 2027 as well as amortization payments becoming due 36, 48 and 60 months following the closing of the loan. Acutus issued warrants to purchase an aggregate of 3,779,018 shares of common stock to Deerfield at a price of $1.1114 per share, subject to certain adjustments.
In conjunction with the new facility, the company settled outstanding debt obligations under its 2019 credit agreement.
“We continue to advance our strategic initiatives to drive adoption of our differentiated mapping and therapy platform as well as improve our financial and operational performance,” Acutus interim CEO and CFO David Roman said in the release. “The first closing of the sale of our left-heart access portfolio as well as the refinancing of our debt structurally transforms the company’s financial position and enables us to further invest in critical product and market development programs. We are pleased with the progress in our business and the execution of our focused operating model and will provide further updates on our second-quarter earnings call in August.”
Perella Weinberg Partners acted as financial advisor to Acutus, and Davis Polk & Wardwell LLP served as legal advisors to the Company. Katten Muchin Rosenman LLP acted as legal advisors to Deerfield Management.
