LivaNova wraps up $190M sale of cardiac rhythm unit after agreeing on a fix for last-minute antitrust wobble

LivaNova has completed the $190 million sale (PDF) of its cardiac rhythm unit to MicroPort Scientific. The final terms of the deal commit LivaNova to paying up to $20 million in indemnity linked to a probe initiated by antitrust officials around 10 days ago.

A French regional antitrust authority kicked off the investigation into companies including a regional subsidiary of the cardiac rhythm unit on April 19. The subsidiary thinks it has complied with the law, but the probe created uncertainty about the risks faced by the business. To nullify the risk, LivaNova has agreed to provide limited indemnity related to the investigation to MicroPort. 

That done, LivaNova and MicroPort have closed the deal. The divestiture frees LivaNova of a unit seen in some quarters as a third wheel only loosely attached to its cardiac surgery and neuromodulation businesses. 

London-based LivaNova began looking into strategic alternatives for the cardiac rhythm management unit in September. Two months later, China’s MicroPort signed a $190 million binding letter of intent to buy the business. Now, the deal has closed.

The completion of the deal moves LivaNova a step closer to the end of a busy period of dealmaking. The unit divestiture was sandwiched in around three deals to buy in assets, creating a series of business development events LivaNova CFO Thad Huston said was “pretty remarkable” on a call with investors in February. Huston expects the level of activity to slow, although LivaNova remains in the market for smaller acquisitions it can easily bolt on or integrate into its operations.

For MicroPort, the acquisition marks a step up in its global ambitions. The medical device company first made its mark in its native China, including through a deal with LivaNova to bring cardiac rhythm products to the country. But in recent years it has made a concerted effort to globalize, culminating in it generating more than half its sales outside China in the first half of last year.