Merit Medical Systems, Inc. (MMSI) has agreed to purchase Cook Medical’s lead management portfolio for a cash consideration of approximately $210 million. This strategic acquisition is expected to close in the fourth quarter of 2024 and will be funded through Merit’s existing cash reserves and borrowings from its long-term credit facility.
Cook Medical’s lead management business specializes in providing a comprehensive suite of medical devices and accessories used in lead management procedures. These procedures are essential for patients requiring the removal or replacement of pacemaker or implantable cardioverter-defibrillator (ICD) leads.
This acquisition aligns with Merit’s Continued Growth Initiatives (CGI) and aims to offer clinicians a wider range of solutions for cardiac intervention patients. From diagnosis to therapy, intervention, and post-procedure care, Merit seeks to provide a complete spectrum of support.
Fred Lampropoulos, Merit’s Chairman and CEO, expressed his enthusiasm for the acquisition, stating that it will bolster their already rapidly growing electrophysiology and CRM business. The addition of differentiated products and a well-established commercial infrastructure from Cook Medical is expected to enhance Merit’s market position within the cardiac intervention sector.
Merit estimates that the global cardiac intervention market represents an annual addressable opportunity exceeding $900 million, encompassing the US, EMEA, and APAC regions. With the integration of Cook’s lead management business starting in fiscal year 2025, Merit anticipates achieving more than $100 million in combined annualized revenue from electrophysiology and cardiac rhythm management within the global cardiac intervention market.
Cook Medical’s lead management business generated approximately $37 million in revenue during 2023. Following the completion of the acquisition, the acquired assets are projected to contribute an additional $4 million to $6 million in revenue for the final three months of fiscal year 2024.
While the deal is expected to strengthen Merit’s market position and expand its offerings, it will also dilute the company’s previously projected adjusted operating margin, net income, and earnings per share (EPS). In light of this, Merit has revised its 2024 adjusted EPS guidance to a range of $3.25 to $3.34, slightly lower than the previous forecast of $3.27 to $3.35 and the consensus estimate of $3.31.
This acquisition marks a significant step for Merit Medical Systems, positioning the company for continued growth and expansion within the dynamic and expanding cardiac intervention market. The acquisition of Cook Medical’s lead management portfolio reinforces Merit’s commitment to providing comprehensive solutions for healthcare professionals and patients in need of cardiac care.
