AtriCure (NSDQ:ATRC) said today that it put up a $300 million offer for SentreHeart and its Lariat left atrial appendage closure device.
Redwood City, Calif.-based SentreHeart has enrolled 535 patients in the Amaze trial comparing Lariat and pulmonary vein isolation with PVI alone in treating atrial fibrillation. Today AtriCure said it expects the study tor each its 600-patient target in early 2020.
The offer includes $40 million in up-front cash and stock, plus $140 million in clinical and regulatory milestones and $120 million in reimbursement milestones, all payable in cash and stock, Mason, Ohio-based AtriCure said. The deal is slated to close “in the next several days,” the company said.
“We believe that SentreHeart is a strategic addition to AtriCure, significantly expanding our addressable markets with a product designed for electrophysiologists,” president & CEO Michael Carrel said in prepared remarks. “With our pursuit of labeling based on the Amaze trial, we are deepening our commitment to provide the broadest possible offering of ablation and left atrial appendage management solutions to our customers and their patients.
“This transaction combines two companies dedicated to solving the challenges associated with afib. We are confident that SentreHeart complements our current product portfolio and intellectual property, augments our commitment to clinical science with the Amaze trial and will leverage our growing commercial channel into the electrophysiology market. We believe that upon FDA approval, use of the Lariat device will continue to advance AtriCure’s competitive position in the market.”
AtriCure raised its sales outlook for 2019 but said it now expects to post adjusted losses per share for the year due to integration and operating costs from the SentreHeart buyout. Adjusted EPS are pegged at -$1.07 to -$1.14 on sales of $224.5 million to $228.5 million, compared with $222 million to $228 million previously.
“We have a strong balance sheet, which has been reinforced by our credit facility with Silicon Valley Bank. As a result, we believe that we can support both the upfront payment and ongoing investments in the combined business with minimal shareholder dilution,” CFO Andy Wade said. “While this transaction will impact short and medium-term profitability, we do not need to raise additional capital to finish the aMAZE Trial or support post-trial commercialization efforts.”
Piper Jaffray is the financial advisor for AtriCure on the deal, with Pepper Hamilton as legal counsel. Guggenheim Securities is the financial advisor for SentreHeart, with Goodwin Procter as counsel.
