Medtronic Expands Device Portfolio With $100M Clot Removal Purchase

Medtronic Expands Device Portfolio With $100M Clot Removal Purchase

The Dublin-based company also paid $500 million in U.S. income tax for transferring $9.8 billion from its overseas subsidies.

Medical device company Medtronic PLC on Monday purchased Lazarus Effect, a privately held maker of products that remove blood clots from the brain.
 
Dublin-based Medtronic made a $100 million, all-cash deal for the Campbell, California-based company.
 
“With this acquisition, Medtronic reinforces its commitment to providing innovative solutions to clinicians and patients fighting stroke,” said Brett Wall, president of Medtronic’s neurovascular division, in a statement.
 
Most notably, Lazarus Effect produces its Lazarus Cover, a nickel titanium “’mesh cover’ that folds over a stent retriever device during clot retrieval and ‘candy wraps’ the stent with the clot inside.” Medtronic already produces a stent retriever device, known as Solitaire.
 
In June, the American Hearth Association/American Stroke Association (AHA/ASA) published new stroke treatment guidelines, recommending a technology such as Solitaire to become a first-line treatment for eligible stroke patients.
 
Roughly 240,000 people were eligible for treatment with a stent retriever last year, however, a mere 13,000 procedures were performed as only about 500 hospitals in the country carry such a device. The revised AHA/ASA guidelines and Medtronic’s recent acquisition could result in a broadening of the product’s availability and application.
 
“Lazarus Effect is pleased to bring our innovative technologies together with Medtronic’s market leading therapies,” Lazarus Effect CEO Martin Dieck said in a statement. “Their support of data driven clinical evidence and the success with their Solitaire stent retriever device make them the clear market leader for treating ischemic stroke.”
 
This deal amounts to the eighth acquisition by Medtronic this year. It kicked off 2015 with the completion of its $49.9 billion agreement for Dublin-based Covidien. (The two companies ultimately combined and Medtronic then relocated to Dublin in a tax maneuver known an inversion).
 
Medtronic then acquired Advanced Uro-Solutions (in February, undisclosed amount), Diabeter (April, undisclosed amount), Aptus Endosystems (June, $110 million), CardioInsight Technologies (June, $100 million), RF Surgical Systems (July, $235 million), Twelve, Inc. (August, $458 million), and Medina Medical (August, $150 million). Specifics for every deal were not disclosed, but Medtronic has spent at least $51 billion on acquisitions so far this year.

On Monday, Medtronic also said it would be paying $500 million in U.S. income tax, according to its SEC filing. The paid income tax derives from approximately $9.8 billion that Medtronic is transferring from its overseas subsides to be used in the U.S. for “general corporate purposes.” Those purposes, stated within the filing, include reducing its debt to EBITDA ratio, returning money to shareholders, and “pursuing financially disciplined [mergers and acquisitions].”

The Wall Street Journal points out that the $500 million out of $9.8 billion roughly amounts to a 5 percent U.S. tax rate, which is rather insignificant compared to the 35 percent tax rate that U.S.-based companies are subject to for profits earned overseas.
 
To date, Medtronic employs more than 85,000 people in more than 160 countries worldwide.