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Medtronic to buy Canadian device firm
The Fridley company will pay $380 million for CryoCath Technologies, a Montreal company that makes devices to treat an abnormal fluttering of the heart.
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In an effort to capitalize on a $2 billion market, Medtronic Inc. said Thursday that it is buying a Canadian company that makes a device to treat atrial fibrillation, an abnormal fluttering of the upper chambers of the heart that can lead to blood clots or stroke.
Fridley-based Medtronic will pay $380 million for CryoCath Technologies Inc. of Montreal.
The deal is expected to close in the fourth quarter.
"Medtronic estimates that up to 5 million patients worldwide are impacted by atrial fibrillation," said Pat Mackin, president of the company's Mounds View-based cardiac rhythm disease management business, in a news release.
"Medtronic and physicians are interested in procedures that are safer, faster and less complex so that more patients can benefit from treatment."
Current treatments for atrial fibrillation include drugs, electrical shock to jump-start the heart, and surgery to deaden the portion of the heart that is beating irregularly.
Ongoing trial
With about $39 million in annual sales in the United States, CryoCath's flagship product is called Arctic Front. It is a minimally invasive cryo-balloon catheter that is marketed in Europe, but not yet in the United States.
The product is currently being tested in a pivotal clinical trial in this country.
"Medtronic needed a footprint in the atrial fibrillation market, and there weren't many companies left to buy, since St. Jude [Medical] has bought a lot of them," said Tim Nelson, an analyst with FAF Advisors in Minneapolis.
Nelson said he was a little surprised that Medtronic bought a company before the results of an important clinical trial are released.
The offer price is almost double Wednesday's closing price of the common shares of CryoCath, the last trading day before the announcement of the offer, Medtronic said.
The companies agreed to a $13.6 million break-up fee.
Medtronic shares closed Thursday at $51.88, down 56 cents.
Janet Moore • 612-673-7752
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