AngioDynamics (Nasdaq:ANGO) announced that it completed the sale of its dialysis product portfolio to Merit Medical Systems.
It was part of a series of product acquisitions worth $132.5 million that Merit (Nasdaq: MMSI) has announced.
Latham, New York-based AngioDynamics sold its dialysis portfolio and the BioSentry product for $100 million in cash. The transaction includes the DuraFlow, DuraMax, Evenmore, Schon XL, Trio-CT and Vaxel Plus hemodialysis catheter brands. It also includes the BioSentry product, a tract sealant system biopsy brand.
AngioDynamics said in a news release that the combined product portfolio generated $32 million in sales in 2023.
The Merit Medical view
Merit Medical specifically made mention of the BioFlo DuraMax dialysis catheter with Endexo technology as a key component of the acquisition. The system features a proprietary material more resistant to thrombus accumulation compared to conventional, non-coated dialysis catheters.
Additionally, Merit said the BioSentry system complements its existing biopsy portfolio. BioSentry reduces the incidence of biopsy-related pneumothorax (collapsed lung).
Merit expects the acquisitions to register as slightly dilutive to its full-year 2023 non-GAAP net income and earnings per share.
“We are selectively investing to expand our product portfolio in key strategic markets that leverage our existing commercial footprint. These acquisitions strengthen our position in the dialysis and biopsy markets, and expand the foundation of our growing specialty dialysis device offering, which includes Wrapsody cell-impermeable endoprosthesis, HeRO graft, and the Surfacer system devices,” said Fred P. Lampropoulos, Merit chair and CEO. “Many dialysis patients rely on these solutions to receive vital therapies. Combining this broad portfolio of interventional solutions within Merit will allow us to leverage our physician relationships and commercial infrastructure to serve more patients in the multi-billion dialysis market.”
The AngioDynamics view
The company plans to use net proceeds to eliminate existing debt and support further strategic investments in growth and profitability. AngioDynamics said its divested assets are included in its medical device business and don’t have a significant amount of direct costs. As a result, the company expects a dilutive impact to adjusted earnings per share. It projects a slightly dilutive impact on corporate gross margins.
AngioDynamics now expects net sales for its recently completed fiscal year (May 31) to range between $338 million and $339 million. That amount remains inclusive of the dialysis portfolio and the BioSentry brand.
“I am excited to announce this divestiture, which supports our focus on our high-growth medtech platforms. While this deal divests strong product lines, we’re pleased with the value we’ve received for these assets, as the transaction strengthens our balance sheet and better positions us to focus on driving growth in our NanoKnife, mechanical thrombectomy and Auryon businesses,” said Jim Clemmer, president and CEO of AngioDynamics. “This is another significant step in our transformation, and finding an excellent partner to take on these leading dialysis and biopsy assets allows our team to more tightly align around the company’s core strategic platforms.”
The deal complements another Merit buy
Merit Medical said its acquisition of the dialysis portfolio comes on the heels of its recent acquisition of another catheter system.
The company recently bought the Surfacer inside-out access catheter system from BlueGrass Vascular Technologies. BlueGrass designed the Surfacer to obtain right-sided central venous access in patients with venous obstructions. This provides them with life-saving therapies including hemodialysis and chemotherapy.
This deal features a total cash consideration of $32.5 million, Merit said.
Needham & Co. raised its price target on MMSI shares, with senior research analyst Mike Matson describing the acquisitions as complementary to Merit Medical’s existing dialysis and biopsy products.
