SOUTH JORDAN, Utah, Sept. 17, 2024 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (NASDAQ: MMSI), a global leader in healthcare technology, today announced it has signed a definitive asset purchase agreement to purchase Cook Medical’s lead management portfolio for total cash consideration of approximately $210 million. Merit expects to fund the transaction through a combination of cash on hand and borrowings under its long-term credit facility. The closing of the proposed transaction is expected to occur during the fourth quarter of 2024, subject to the receipt or waiver (in accordance with the provisions of the asset purchase agreement) of certain closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing conditions. Cook Medical’s lead management business has 34 years of operating history and provides a comprehensive end-to-end product portfolio of medical devices and accessories used in lead management procedures for patients who need a pacemaker or an implantable cardioverter-defibrillator (ICD) lead removed or replaced. “This transaction is consistent with our Continued Growth Initiatives (CGI) and positions Merit to offer clinicians an increasingly comprehensive set of solutions to support cardiac intervention patients, from diagnosis, to therapy and intervention, to post-procedure care, ” said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer. “We believe this transaction will strengthen our fast-growing, high-margin electrophysiology and CRM business with the addition of differentiated products and an established commercial infrastructure. We believe the transaction will enhance our position in the cardiac intervention market, which we estimate represents an annual addressable opportunity of more than $900 million in the US, EMEA and APAC regions. Specifically, beginning in fiscal year 2025, the addition of Cook’s lead management business positions Merit to represent more than $100 million in combined annualized electrophysiology and cardiac rhythm management revenue serving the global cardiac intervention market. Mr. Lampropoulos continued: “We have updated our full-year 2024 financial guidance to include the projected impact of this acquisition from a prospective closing date of October 31, 2024 to December 31, 2024 and, importantly, we have reaffirmed our updated full-year 2024 financial guidance previously issued on August 1, 2024. While we anticipate the transaction will be modestly dilutive to our full-year 2024 non-GAAP profitability given the partial-year contribution, we believe the financial profile of this acquisition is very attractive and is consistent with our goal of delivering sustainable, constant currency growth, improving profitability and strong free cash flow generation. We look forward to discussing this acquisition and our updated outlook for 2024 on our third quarter earnings report on October 30, 2024. Non-GAAP net income; non-GAAP earnings per share; non-GAAP gross margin; non-GAAP operating margin and constant currency revenue are non-GAAP financial measures. A description of these financial measures is included under the heading “Non-GAAP Financial Measures” below. A quantitative reconciliation of such financial measures to comparable GAAP financial measures is not available without unreasonable effort. Merit believes that the assets it proposes to acquire from Cook Medical generated approximately $37 million of revenue over the twelve-month period ended December 31, 2023, with sales to customers in the US, EMEA, APAC and ROW representing approximately 41%, 42%, 11% and 6%, respectively. If the proposed transaction (including Merit’s proposed execution of a transition services agreement pursuant to which Cook Medical would provide manufacturing and other services to Merit during a two-year transition period) is consummated, of which there can be no assurance, the assets Merit proposes to acquire from Cook Medical, are projected to contribute revenue, from a projected closing date of October 31, 2024 through December 31, 2024, in the range of $4 to $6 million and are projected, during the same period of time, to dilute Merit’s previously forecasted non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per share, inclusive of approximately $1.8 million of lower interest income on cash balances used for the total purchase consideration and excluding approximately $1.9 million of non-cash and non-recurring transaction-related expenses, and to be dilutive to Merit’s full-year 2024 GAAP net income and GAAP earnings per share. The acquisition is projected to be accretive to non-GAAP gross margin, accretive to non-GAAP operating margin in the first full-year post close, and accretive to non-GAAP net income and non-GAAP earnings per share in the second full-year post close. The acquisition, if completed, is projected to be dilutive to Merit’s GAAP net income and GAAP earnings per share in the first full-year post close, neutral in the second-full year post close and accretive thereafter. Merit’s updated full-year 2024 financial guidance now reflects the projected impacts of the acquisition of Cook Medical’s lead management business from a projected closing date of October 31, 2024 through December 31, 2024. Merit is otherwise reaffirming prior full-year 2024 financial guidance previously announced on August 1, 2024. Based upon the information currently available to Merit’s management, for the year ending December 31, 2024, after giving effect to the projected contribution of the assets proposed to be acquired from Cook Medical, assuming the proposed acquisition closes on October 31, 2024 and absent material acquisitions, non-recurring transactions or other factors beyond Merit’s current expectations, Merit now expects the following financial results: Revenue and Earnings Guidance*
