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By OMAR FORD
Medical Device Daily Staff Writer
Vascular Solutions (Minneapolis) reported that it has acquired the Venture wire control catheter, a deflectable-tip catheter used to provide guidewire directional control in challenging coronary and peripheral interventional procedures, from St. Jude Medical (St. Paul, Minnesota) for $3 million.
The Venture catheter's deflectable atraumatic distal tip can be angled up to 90 degrees, providing physicians with control and precision while navigating complex turns in the vessel and lending back-up support when crossing tight lesions. The Venture catheter is currently sold in U.S. and international markets in three versions – over-the-wire, rapid-exchange and coronary sinus – all of which are 6 French-compatible and directionally control a standard 0.014-inch guidewire during difficult interventions.
"We sell a lot of devices that put tools into the cardiologist's tool box for coronary and perpheral interventional procedures," James Hennen, CFO, Vascular Solutions, told Medical Device Daily. "This is a nice niche type device that fits right into what we're trying to do."
Vascular Solutions focuses on developing unique clinical solutions for coronary and peripheral vascular procedures. The company's product line consists of over 60 products in three categories: catheter products, hemostat products and vein products. Vascular Solutions delivers its products to interventional cardiologists, interventional radiologists, electrophysiologists, and vein specialists through its direct U.S. sales force and international independent distributor network.
In terms of the aforementioned deal with St. Jude, Vasular Solutions said that it has acquired all of the remaining finished goods inventory of the Venture catheter for immediate transition of existing sales, and has acquired the manufacturing equipment to begin the process of restarting and qualifying production in Vascular Solutions' existing manufacturing facility. Vascular Solutions expects to complete the manufacturing qualification during 2Q13, at which time it plans to re-launch the device on a worldwide basis.
"We'll continue with the same name," Hennen said. "It's been marketed by St. Jude for three plus years now so we'll go ahead and use that and keep the same branding."
The total purchase price is $3 million, consisting of an up-front payment of $2.25 million and an additional payment of $750,000 upon successful qualification of the transitioned manufacturing processes. The purchase price is being financed with cash on hand. The deal is expected to be neutral to Vascular Solutions' earnings this year. Beginning in 2013, Vascular Solutions expects the addition of the Venture catheter to be modestly accretive on an earnings per share basis.
"For our size company, we launch and develop products that are going to be between $2 million and $20 million in revenue . . . and there aren't a lot of companies in the medical device field that are willing to do that," Hennen said. "That's exactly why St. Jude just shut this product down because it's right in that $2 million to $10 million range, but it's not large enough for St. Jude, it's more of a nuisance for them to have to manufacture a product of this size. So we see Vascular Solutions nicely filling that gap."
In other dealmaking activity:
• Streamline Health Solution (Cincinnati), a provider of enterprise content management and business analytics solutions for healthcare organizations, reported the acquisition of Meta Health Technology (New York), a provider of health information management solutions for hospitals, clinics, physician group practices and long-term care facilities across the U.S. and Canada.
"The acquisition of Meta, with its outstanding reputation in the health information management (HIM) space, represents the continuation of our on-going growth strategy and–as with the Interpoint Partners acquisition last year–is reflective of our organization becoming more market-facing where our solutions development is led by the needs and requirements of our clients and the marketplace in general," said Robert Watson, president/CEO of Streamline Health Solutions. "Our clients, as well as all providers throughout the country, are facing the looming challenge of converting from ICD-9 to ICD-10. The Meta suite of solutions, when bundled with our existing solutions, will help current and prospective clients better prepare for this challenge. In addition, the pending release of a computer-assisted coding solution (CAC) will place Streamline Health at the core of addressing the complexities of the ICD-10 transition.
As we move forward, we believe that the integration of our business analytics solutions with the coding solutions acquired in this transaction will position us to address the complicated issues of clinical analytics as our clients prepare for the proposed changes in commercial and governmental payment models. This transaction firmly establishes our company as a "go-to" vendor of enterprise health information technology solutions."
"After 34 years of continued growth and success in the market, Meta's acquisition by Streamline Health represents a natural progression, as the resources that Streamline Health brings will enable us to better serve our clients and to even further expand our product and service offerings," said Eli Nahmias, president/CEO of Meta Health Technology. "In addition to implementing our software at a client's site, we will now be able to offer it on a Software-as-a-Service (SaaS) basis, which will eliminate the need for a hospital to invest time and resources in implementation. These new channels will enable us to be even more successful going forward."
Barbara Hinkle-Azzara, RHIA, COO of Meta, who will join Streamline Health as VP and General Manager for this subsidiary, said "Our entire team of associates is excited to join the Streamline Health team and to have the opportunity to work towards advancing our collective vision to become a world-class healthcare information technology company. Together we can continue to provide industry-leading solutions for health information management to our clients and the marketplace, as well as to bring Streamline Health's robust suite of content management and business analytics solutions to Meta's clients."
Streamline acquired the outstanding capital stock of Meta for about $15 million, comprised of $13.4 million in cash and $1.6 million in Streamline Health stock at a price equal to the average of the previous 10 days closing price as reported by Nasdaq. In conjunction with this acquisition, Streamline Health has restructured its financing agreement with Fifth Third Bank whereby the bank will provide the company with a new $5 million revolving line of credit, a $5 million senior term loan, and a $9 million subordinated term loan, a portion of which was used to re-finance the previously outstanding $4.1 million subordinated term loan. The new financing package brings Streamline Health's average cost of capital down to about 8.5%.
• Teleflex (Limerick, Pennsylvania), a provider of medical devices for critical care and surgery, said that it has completed the previously reported sale of its OEM Orthopedics business to Tecomet (Wilmington, Massachusetts).
The company said that it was selling the OEM business to Tecomet for $45.2 million (Medical Device Daily, July 19, 2012).
The OEM Orthopedics business is reflected as a discontinued operation in Teleflex's consolidated financial statements.
Ballard Spahr acted as legal counsel to Teleflex in the transaction.
Published August 20, 2012
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