SurModics, the Eden Prairie-based maker of slippery surface coatings that help deliver medical devices via blood vessels, has bought an Irish medical-balloon company in the hopes of selling “whole-product solutions” to other device companies.
SurModics said Friday that it paid about $32 million to buy Ballinasloe, Ireland-based Creagh Medical, including $19 million up front and the remainder contingent on milestones for revenue and other goals.
Creagh is expected to generate at least $3.5 million in revenue for SurModics in 2016. The acquisition will dilute earnings for that fiscal year, but then become accretive to earnings in 2017, the company said in a news release.
Creagh Medical designs and manufactures balloon catheters that are inserted into narrowed or blocked blood vessels and inflated inside the body to treat the blockage. SurModics, meanwhile, makes specialized surface coatings, including some that can be put on the outsides of stents and medical balloons to deliver drugs to specific sites in the body.
“Given SurModics’ leadership in coating technologies and current drug-coated balloon program, the combined organization will have the capability to support customers from concept to commercialization, including turnkey manufacturing of innovative whole-product solutions,” Friday’s news release said.
SurModics employed 120 people and generated $57 million in revenue last year. A majority of that revenue came from royalties and licensing agreements for its proprietary medical device surface-coating technologies, though it also sells products used in vitro diagnostics.
Founded in 1979, SurModics has a base of large customers in the industry, including Boston Scientific Corp., Spectranetics Corp, and St. Jude Medical. In 2014, Medtronic was SurModic’s largest customer, comprising 19 percent of company revenue — and that was before Medtronic bought Covidien, another SurModics customer, according to securities filings.
Creagh was founded in 2006 and has a research and manufacturing facility in Ballinasloe, “ideally located between the Galway and Athlone medical device hubs,” the company said. Creagh CEO Tom Greaney will join the SurModics executive team and report directly to Chief Executive Gary Maharaj.