Medtronic Inc. (NYSE:MDT) said today that it will acquire Salient Surgical Technologies for $525 million in a deal that’s been in the works for more than 11 years.
Previously known as TissueLink Medical, Portsmouth, N.H.-based Salient launched in August 1999, after securing an exclusive global license to “wet” electrode technology developed by Medtronic. The Fridley, Minn.-based device conglomerate has participated in each of Salient’s seven funding rounds over the last decade. In January, the company raised a final, $15 million round.
Net of MDT’s ownership stake, the transaction value is roughly $480 million.
“Integrating the Salient Surgical Technologies organization will bring new applications to Medtronic Surgical Technologies’ current surgical therapy areas and expand the company’s opportunities in adjacent offerings, helping Medtronic serve new customers and better meet the needs of existing ones,” Chris O’Connell, executive vice president and president of Medtronic’s restorative therapies group, said in a prepared release.
Salient Surgical sells several devices using its transcollation technology to control bleeding during surgeries. Revenues grew 55 percent in 2008, the last time privately held Salient Surgery publicly disclosed sales figures, reaching an estimated $45 million.
Transcollation gently seals soft tissue with a combination of radio-frequency energy and saline. As opposed to electrocautery, in which tissue is literally seared shut, transcollation raises tissue temperatures to around 70°C (160°F). At that temperature, collagen proteins begin to change shape and swell at the molecular level, permanently closing gaps and blood vessels as wide as 1mm.
In a separate release, MDT also said it will pay $120 million for PEAK Surgical Inc. That Palo Alto, Calif.-based company makes a line of disposable cutting devices, PlasmaBlade, that use electrode insulation techniques to control bleeding. The devices can be used to cut through all types of soft tissue, including skin, fat and muscle.
Both PEAK and Salient will operate under Medtronic’s restorative therapies group, which includes its spinal, neuromodulation, diabetes, and surgical technologies units. Those businesses pulled in nearly $16 billion in sales last year. The restorative therapies operation has come under intense pressure lately over the brewing Infuse bone growth controversy.