Dec. 22, 2015, 5:33 PM
- CryoLife (NYSE:CRY) is buying On-X Life Technologies, an Austin-based mechanical heart valve maker, for $130M. 70% of the payout will be in cash, and 30% in stock. The deal is expected to close in January.
- On-X's valves have been installed in 200K+ patients. With the company having 2014 revenue of $33M (13% revenue CAGR over the prior 4 years), CryoLife is paying a little under 4x trailing sales.
- CryoLife CEO J. Patrick Mackin: "We are very excited about the outlook for continued growth for several reasons. First, the On-X aortic valve is the only mechanical valve to receive FDA labeling requiring an INR (international normalized ratio) level of only 1.5-2.0. This labeling provides the On-X valve with a distinct competitive advantage. Second, with the addition of the On-X sales team to the CryoLife team, our U.S. cardiac surgery sales force will more than double. Third, as the power of On-X's technology and its supporting robust clinical data become more widely known through our expanded sales organization, we believe the acquired portfolio will continue to post double-digit compounded growth from 2016-2020. Finally, we believe we will also see strong synergy between our product portfolios, which will drive cross-selling opportunities across our entire business."
- For reference, CryoLife closed today with a $289M market cap. The company has obtained a $95M, 5-year, credit facility to help pay for the cash portion of the On-X deal. Shares are unchanged after hours for now.