Vascular Solutions to Pay $6.5M for Snare Products
Vascular Solutions, Inc., said Wednesday that it will pay $6.5 million to acquire several snare products from an out-of-state medical-device company.
Minneapolis-based Vascular Solutions has been selling two of the snare products-the Expro Elite and Micro Elite-since 2008 under a distribution agreement that it had with Acton, Massachusetts-based Radius Medical, LLC, the company from which the snare assets are being purchased.
Vascular Solutions-which develops products for coronary and peripheral vascular procedures-said that it will transfer the product manufacturing from Massachusetts to Vascular Solutions' existing facility in Minnesota over the next six months.
The purchase price includes an immediate payment of $5 million in cash and an additional $1.5 million payable upon the transfer of the manufacturing processes. Additionally, Radius Medical will earn 25 percent of any net sales that exceed $2 million, $2.5 million, and $3 million, respectively, for calendar years 2011, 2012, and 2013.
“We are excited about owning the Expro Elite and Micro Elite snares and capturing the entire margin on the sale of the product while adding international sales,” Howard Root, CEO of Vascular Solutions, said in a statement. “Upon completion of the manufacturing transfer, we expect to be able to both improve our gross margin and adopt more competitive pricing to gain market share in the existing $35 million snare market.”
Later this year or in early 2011, Vascular Solutions will launch two additional snare products-the Quattro Elite and the Sympro Elite.
“We expect the acquisition will be accretive to our earnings by approximately 2 cents per share in 2011, with only modest transition and integration costs in the fourth quarter of 2010,” Root said.
In addition to announcing its acquisition, Vascular Solutions also said Wednesday that it earned $1.46 million, or 9 cents per share, in net income during the third quarter-representing a 2.3 percent decline from last year's third quarter. Revenue, however, increased 15.3 percent to $19.86 million in the quarter that ended in September.
“Contrary to what many companies in our sector are reporting, we are pleased to report 15 percent revenue growth in the third quarter to a new record quarterly level, resulting from substantial new product launches and continued sales expansion of our existing products,” Root said in a statement. “Of special note, our GuideLiner catheter has generated unprecedented interest in a Vascular Solutions' product since its U.S. launch less than a year ago, and that interest is translating into broader sales opportunities and increased visibility at major medical meetings.”
The company expects net income ranging from 94 cents to $1 per share on revenue of $20.8 million to $21.2 million in the fourth quarter.
Vascular Solutions is among Minnesota's 90-largest public companies based on revenue, which totaled $68.4 million in 2009.