Disposable products developer Merit Medical Systems has signed a definitive merger agreement to acquire breast tumor localization technology provider Cianna Medical.
The acquisition includes an upfront payment of $135 million, with potential earn-out payments of an additional $15 million for supply chain and scalability achievements. The deal also includes up to an additional $50 million for sales milestones.
The boards of directors of both companies approved the transaction, and it is subject to the satisfaction or waiver of certain closing conditions, including the approval of Cianna Medical stockholders, clearance under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions. Merit Medical expects the transaction to close during the fourth quarter of 2018.
Cianna develops products for wire-free breast localization, as well as the Scout and Savi Brachy technologies for the delivery of radiation therapy, tumor localization, and surgical guidance. Scout was introduced in 2015 and is projected to produce $29 million in revenues in 2018. The company is estimated to have a 5% market share with no revenues currently outside the U.S.
Merit plans to keep substantially all of Cianna Medical's commercial and R&D teams in place. The firm also intends to market Savi Brachy, which uses thin tubes to deliver radiation to lumpectomy sites. Merit only markets the catheter and is not involved in radiation seeds or the transport thereof. The firm's medical advisors said this is an underutilized technology.
