Updated February 1, 2012, at 6:30 p.m.
AngioDynamics said the deal will double its share of the vascular access market “while building critical mass in the peripheral vascular market,” according to a press release.
ANGO shares opened at $14.80 this morning on the news, up 4.2%, before retreating to yesterday’s close of $14.20 as of about 10:20 a.m.*
“The acquisition of Navilyst brings AngioDynamics scale, technology and operational excellence,” AngioDynamics president & CEO Joseph DeVivo said in prepared remarks. “It strengthens AngioDynamics’ current business by enabling us to focus on our key channels – Vascular Access, Peripheral Vascular and Oncology/Surgery – and accelerates the ability of our global sales leaders to focus on key clinical call points. The combined company will offer a more compelling portfolio of products to our customers, allowing the sales force to be more productive and compete more effectively.”
The deal, expected to close during AngioDynamics’ fiscal 4th quarter ending in May, prompted ANGO to issue new guidance for fiscal 2013. Net sales are now predicted to reach $360 million; earnings per share are slated for an 8-cent boost excluding costs related to the merger and 1-time items. The acquisition is also expected to save about $5 million to $7 million annually during fiscal 2013 “and increase to approximately $10-15 million on a run-rate basis over a 2-3 year period,” according to the release.
AngioDynamics said it plans to fund the deal with $97 million in cash and $150 million in debt and equity financing from J.P. Morgan, Bank of America and KeyBank National Assn. That will leave Avista with a roughly 27% stake in AngioDynamics.
“Upon closing, AngioDynamics expects to have at least $50 million in cash and liquid investments, $150 million in debt and a $50 million revolving credit facility with the aforementioned banks,” according to the press release.
*Correction, February 1, 2012: This article originally stated that AngioDynamics agreed to a purchase price of $14.20 per share. The correct value is $372 million total. Return to the corrected sentence.