ArthroCare ($ARTC) scooped up a maker of sinus implants and surgical tools for $45 million in cash, a move that helps boost the device company's offerings in the space. It could also give sales a crucial shot in the arm.
Austin, TX-based ArthroCare, a surgical toolmaker, already sells some ENT-related products. But the company said its acquisition of San Antonio-based ENTrigue will add some complementary items to the mix. ENTrigue makes and sells implants, disposables and surgical instruments targeted to endoscopic sinus surgery.
Ear, nose and throat devices and surgical tools are big business. ArthroCare notes that 500,000 sinusitis patients face surgery in the U.S. each year. And over 30 million people in the U.S. alone face sinusitis problems. ArthroCare is clearly planning for the future in beefing up its own sinus-related device and surgical tool offerings.
Beyond that, ArthroCare's acquisition could help jolt flat revenue and a decline in net income. During the fiscal 2013 first quarter, ear, nose and throat surgical product sales grew 8.8% internationally but dropped 9.3% in the Americas. The company booked $11.2 million in net income during the quarter, versus nearly $13 million over the 2012 first quarter. Revenue, at $92.3 million, was essentially flat year over year. And so ArthroCare clearly hopes that ENTrigue can help restore sales and revenue growth.
While the sale price is $45 million, ArthroCare may end up paying more down the line. The deal gives previous ENTrigue shareholders the right "to receive contingent consideration" on the anniversary of the sale closing over 5 years, based on net sales increases of ENTrigue products.
- read the release