Catheter Precision (NYSE:VTAK) announced today that it agreed to divest its atherectomy catheter technologies to an unnamed strategic acquirer.
The company said it conducted a comprehensive portfolio review and determined that monetizing its non-core assets enhances its capital efficiency and sharpens focus on its high-growth electrophysiology platform.
Catheter Precision’s deal includes an upfront cash payment of $15,000 upon closing. It also includes a 5% equity stake in the acquiring company. That deal has anti-dilution protection up to $5 million of additional equity capital invested in the acquiring company.
The deal also includes 10-year royalty payments, totaling 1.5% at baseline with increases to 3% on quarterly net sales above $5 million. Catheter Precision’s portfolio of atherectomy catheters includes FDA approvals and patents, the company said in a news release.
According to the company, the deal helps it focus on capital allocation for core cardiac arrhythmia technologies. It also strengthens the balance sheet and simplifies its operating structure with enhanced strategic clarity. Additionally, the company said it will receive a small cash infusion with potential long-term equity upside. It also anticipates recurring revenue potential through the performane-based royalties.
“Management believes the transaction positions the company to accelerate execution across its electrophysiology product portfolio while maintaining exposure to future commercial success of the divested technologies,” Catheter Precision said.
Catheter Precision continues to pursue advances in electrophysiology following its reverse merger with Ra Medical in 2023. The deal was initially announced in September 2022. Under the terms of the agreement, Catheter Precision became a wholly-owned subsidiary of Ra Medical with a focus on the cardiac electrophysiology market.
