The deal for Galway, Ireland-based Apica also confers long-term tax advantages to Pleasanton, Calif.-based Thoratec, much like Medtronic‘s (NYSE:MDT) $43 billion acquisition of Covidien (NYSE:COV), although the loss of a U.S. R&D credit will increase its tax rate over the short term.
The Apica technologies include a ventricular assist device surgical implant system and the Apica Access Stabilization & Closure device for use in transcatheter aortic valve implants transcatheter mitral valve implants, using the transapical approach, according to a press release.
"The VAD SIS specifically leverages the proven existing technology foundation of the ASC with the potential to support less invasive and off-pump implantation of HeartMate products while seeking to facilitate reproducible clinical outcomes and wider adoption of these implant techniques," according to the release.
Thoratec said it plans to take over the development of the devices immediately, noting that the ASC device received CE Mark approval in the European Union last year.
"We believe Apica represents an exciting transaction that will further enhance the strong market position of our HeartMate product line over time through introduction of an elegant suite of products customized for VAD procedures," president & CEO Gary Burbach said in prepared remarks. "Once developed, we expect Apica’s unique technology benefits will enable both expansion of the overall VAD market as well as increased penetration for Thoratec devices."
The deal is expected to add $3 million to Thoratec’s operating expenses this year and another $6 million to $7 million in 2015, the company said.
"Additionally, since Apica is an Irish-domiciled entity, Thoratec’s tax rate will increase modestly during the developmental phase of the VAD SIS program due to the loss of U.S.-based expense deductions, although the company anticipates meaningful long-term tax benefits from this transaction," according to the release.