Industry Trend Analysis - CryoLife Will Continue To Build Scale - 23 OCT 2017
BMI View: CryoL ife ' s acquisition of Jotec will broaden its aortic surgery portfolio, and will strengthen its ability to compete in growing endovascular surgical markets. Inorganic growth will continue to be a preferred growth strategy for CryoL ife as it aims to build scale and challenge large-cap manufacturers in the cardiovascular device market. However , the company will be more leveraged following the deal, implying slightly increased financial risk.
CryoLi fe, a medical device and tissue processing company with a focus on cardiac and vascular surgery, has agreed to acquire Jotec, a Germany-based stent graft and surgical graft manufacturer. Under terms of the agreement, CryoLife will acquire Jotec for an upfront payment of USD225mn, consisting of 75% in cash and 25% in CryoLife shares. CryoLife expects to finance the transaction and related expenses, as well as refinance its existing USD69mn term loan, with new USD255mn senior secured credit facilities.
|Mixed Share Price Performance Through FY2017|
|Normalised Equity Performance CryoLife/S&P 500 Health Care Equipment Sub Industry Index, 2016-2017|
|Source: Bloomberg, BMI|