Medtronic ($MDT) will pay $800 million in cash up front to acquire the privately held Ardian. In addition, Medtronic will pay commercial milestones equal to the annual revenue growth through the end of fiscal year 2015. Medtronic previously invested in Ardian and holds an 11 percent ownership stake in the company.
Founded in 2003, Mountain View, CA-based Ardian has been working with researchers to develop a safe, effective treatment option that could offer a better approach to managing hypertension, according to the company's website. Data from a study of Ardian's flagship product, the Symplicity catheter system, were recently released at the American Heart Association 2010 Scientific Sessions in Chicago and published in The Lancet. Patients treated with the Ardian device experienced a 33 mmHg greater reduction in systolic blood pressure at six months than the control group. The system has received CE mark and Australia TGA listing, but is not approved for sale in the U.S.
The transaction is expected to close in Medtronic's third fiscal quarter of 2011 and is subject to customary closing conditions.
In September, Medtronic Chairman and CEO Bill Hawkins said the company will be "opportunistic" in seeking acquisitions of up to $1 billion to restore sales growth, Bloomberg reported. "If we see something that's a good strategic fit, we have the ability to act on it," Hawkins told the news service. "We're not in a reactive mode, like we have to go out and do more acquisitions now." He declined to say what areas the company is looking into.
Medtronic has announced 25 pending or completed acquisitions over the past five years, as Bloomberg notes, with an average size of $446 million and an average premium of 71 percent. The biggest deal was the 2007 purchase of spine-surgery device maker Kyphon Inc. for $3.8 billion. Medtronic had $3.9 billion in cash and short-term investments as of July 10.
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