St. Jude Medical is spending $200 million for NeuroTherm, a specialist in spinal pain management.
St. Jude Medical said Monday it will acquire NeuroTherm Inc., a specialist in therapies for back pain, for $200 million in cash.
The acquisition will add complementary products to St. Jude's existing chronic pain management portfolio, which contributes just a small amount of St. Jude's $5.5 billion in annual sales.
NeuroTherm will add just $10 million to $15 million to St. Jude's sales this year, will have a neutral effect on 2014 profits and be additive in 2015, St. Jude said.
NeuroTherm products use radio-frequency ablation to treat chronic spinal pain. The minimally invasive procedure uses pinpoint application of heat to destroy nerves in the neck and back that contribute to chronic pain.
"Neurotherm's radio-frequency ablation products are an ideal complement to St. Jude Medical's chronic pain portfolio, providing our global sales force with additional interventional pain therapies," Michael Rousseau, St. Jude's chief operating officer, said in a statement.
Rousseau noted that, following the acquisition, St. Jude will be the only firm to offer both a spinal cord stimulation device and the ablation process to people who are dealing with chronic back pain.
NeuroTherm's flagship technology is a radio-frequency generator that allows real-time temperature monitoring and continuous delivery of energy to ensure complete treatment of each targeted spinal nerve.
"St. Jude Medical's global leadership in chronic pain represents an excellent opportunity to bring NeuroTherm's RF ablation technologies to more pain specialists and patients," Christopher von Jako, NeuroTherm's CEO, said in a statement.
NeuroTherm is a closely-held firm based in Wilmington, Mass., with offices in the Netherlands, United Kingdom and Germany and has direct and indirect sales professionals in 65 countries.
St. Jude, based in Little Canada, ended 2013 with $1.4 billion in cash and near-cash items, the most in the last 10 years. The deal is expected to close by the end of the third quarter.
BofA Merrill Lynch advised St. Jude Medical and Piper Jaffray & Co. advised NeuroTherm on the deal.