Thoratec Corp. could be on the prowl for another early-stage medical device maker, after anti-trust concerns at the Federal Trade Commission forced it to spike its proposed $282 million acquisition of HeartWare International Inc., the Reuters news service reported.
Possible targets include Danvers, Mass.-based Abiomed Inc., New Jersey’s Circulite Inc. and World Heart Corp., according to the report.
“[Thoratec] has about $300 million in the bank and it is not earning them any money. I think they want to put it to use,” SMH Capital analyst Suraj Kalia told the news service.
Or Thoratec itself could become an acquisition target for other device makers.
But buyer beware: Garp Research & Securities Co. analyst Alastair Mackay told the news service that big conglomerates run the risk of overpaying for Thoratec, where shares this year have risen about 13 percent, to $27.82 — about 35 times forward earnings, compared with a sector average of about 20.
“Theoretically, Thoratec would be the first option [for would-be acquirers]. It is going to be in the destination therapy market by early next year, which is the Holy Grail,” SMH Capital’s Kalia told Reuters.