An Atlanta biomedical device company has launched an unsolicited takeover bid to acquire privately held Medafor Inc., becoming the largest shareholder of the Brooklyn Center-based developer of blood-clotting technologies.
On Wednesday, CryoLife Inc. said it has purchased 1.6 million shares of Medafor's common stock for $2 a share, or $3.2 million. The shares were purchased from Medafor's unnamed founders and other principal shareholders. Now, CryoLife wants to acquire the remaining shares of Medafor stock for $2 a share in cash and CryoLife stock.
The two companies aren't strangers. CryoLife currently has the exclusive rights to distribute a Medafor technology called HemoStase in the United States and in some international markets. A plant-based powder that rapidly dehydrates blood and promotes clotting, the product is used in cardiac and vascular surgery.
In a statement, Steven Anderson, CryoLife's chairman, president and CEO, said the offer is an effort to gain control of the HemoStase product, which accounted for $6 million in CryoLife sales in 2009.
"We believe this technology has tremendous untapped growth potential, provided Medafor is able to surmount the capital constraints currently facing the company, obtain the liquidity needed to invest in the technology's market rollout, and put in place the skilled management necessary to oversee the technology's development," Anderson said. The $2-a-share purchase price "is both fair and generous."
While representatives from Medafor were not available for comment, a post on the company's website details an ongoing legal battle between the two companies over previous offers and a dispute over the HemoStase distribution agreement.
"CryoLife needs Medafor, not the other way around," the statement said. "It is one thing to undervalue a technology; it is something else entirely to attempt to financially bully a smaller company into submission."
Wednesday's offer wasn't the first time CryoLife approached Medafor's management team and board of directors about a potential deal. Other entreaties were made in November 2008 and February 2009, according to a statement on Medafor's website. CryoLife, with $105 million in annual revenue, was repeatedly rebuffed.
