Massachusetts-based HeartWare International (Nasdaq: HTWR), has entered into a definitive agreement to acquire Valtech Cardio, a privately-held Israeli company that specializes in the development of innovative surgical and transcatheter mitral valve repair and replacement devices.
The transaction was approved by the boards of directors of both companies, and is expected in late 2015. According to the terms of the agreement, Valtech shareholders will receive an up-front consideration of 4.4 million shares of HeartWare common stock; 800,000 shares of HeartWare common stock, contingent upon CE Mark approval for Cardioband; and 700,000 shares of HeartWare common stock upon the earlier of first-in-man implants for either Cardioband tricuspid or CardioValve. The transaction also includes warrants to purchase 850,000 shares of HeartWare common stock at an exercise price of $83.73 per share (based on a volume weighted average price of HeartWare shares) exercisable upon attainment of $75 million in net sales (trailing 12 months) of Valtech products, and an earn-out payment of $375 million (payable in cash or stock, at the discretion of HeartWare), upon attainment of $450 million of net sales (trailing 12 months) of Valtech products.
“We have been actively monitoring the mitral space for several years, given the overlap of patient population and referral channel with our VAD business,” said Doug Godshall, President and CEO of HeartWare. “We identified Valtech as having the broadest, most compelling portfolio several years ago, which led to an investment in 2013. This investment gave us a unique opportunity to observe Valtech’s significant progress across their portfolio of valve repair and replacement technologies. It is from this vantage point that we have concluded that Valtech’s platforms represent the most innovative and comprehensive portfolio of interventional and surgical products for mitral and tricuspid repair and replacement in development today. Valtech provides HeartWare with commercial-stage products for mitral repair, as well as a robust technology pipeline, an advanced R&D center and an impressive, experienced team with a proven track record. This combination represents an attractive opportunity for value creation for HeartWare shareholders, customers, employees and patients by expanding HeartWare’s footprint in the high-growth structural heart market.”
“Valtech has benefited significantly from HeartWare’s early investment in our company. Since then, we have developed a strong relationship based on a shared mission to deliver transformative products to patients with advanced heart failure and degenerative heart conditions,” said Amir Gross, Founder and CEO of Valtech.
Valtech Cardio, Ltd., founded in 2005, is a privately held company specializing in the development of devices for mitral and tricuspid valve repair and replacement. Valtech Cardio has full in-house development, manufacturing, and clinical research capabilities, and over 130 patents and patent applications. The company, comprised of multidisciplinary development teams, works in close collaboration with world-renowned heart specialists to provide the best possible therapy for mitral patients. Valtech Cardio is headquartered in Or Yehuda, Israel.
HeartWare International, Inc. develops and manufactures miniaturized implantable heart pumps, or ventricular assist devices, to treat patients suffering from advanced heart failure. The HeartWare Ventricular Assist System features the HVAD pump, a small full-support circulatory assist device designed to be implanted next to the heart, avoiding the abdominal surgery generally required to implant competing devices. The HeartWare HVAD System is approved in the United States for the intended use as a bridge to cardiac transplantation in patients who are at risk of death from refractory end-stage left ventricular heart failure, has received CE Marking in the European Union and has been used to treat patients in 46 countries. The device is also currently the subject of a U.S. clinical trial for destination therapy. HeartWare is headquartered in Framingham, Massachusetts, and has a current Nasdaq market capitalization of $1.14 billion.