February 26, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
American medical equipment producer Cyberonics and Italian medical device maker Sorin will merge in the second-largest US/European deal done so far this year, the companies said Thursday, creating a new entity with a combined value of almost $3 billion.
The new Cyberonics/Sorin marriage, tentatively dubbed “NewCo,” will have pro-forma revenues of approximately $1.3 billion and is slated to be cash accretive to all shareholders from 2016, said Cyberonics Thursday. Sorin CEO André-Michel Ballester will now become chief of NewCo.
Houston-based Cyberonics has long coveted a foreign address so it can avoid high American corporate taxes, but executives at both firms insisted Thursday the deal was done primarily for strategic reasons, not for a so-called “tax inversion.”
“This transformational transaction maximizes both companies’ strengths and leadership positions for the benefit of patients and our shareholders,” said Dan Moore, chief executive officer of Cyberonics.
The newly merged company will now have around 4,500 employees in 100 countriesand said it intends to apply for a dual-listing on the NASDAQ in New York and the London Stock Exchange. Once the deal is completed, a full dilution will have Sorin’s shareholders owning about 46 percent of the combined company, with Cyberonics shareholders gaining the lion’s share of 54 percent.
Moore said Sorin is an “ideal partner,” particularly because of its solid heart failure programs and the ability to combine Vagus Nerve Stimulation with cardiac rhythm management technology.
“Sorin’s well-established international operations are expected to accelerate our epilepsy growth strategy by enabling us to reach a larger number of potential new patients in the underpenetrated markets outside the U.S. while integrating Sorin’s technology expertise into future neuromodulation products,” said Moore. “While each company has a strong track record of execution on its own, the geographic diversification, benefits of scale and strong financial profile of the combined company will create tremendous new opportunities to drive growth and build significant shareholder value.”
The companies said in a statement that it will quickly focus on developing its heart failure, sleep apnea and percutaneous mitral valve products, with European market entry starting as early as 2015. Cyberonics recently received CE Mark approval of its VITARIA device delivering autonomic regulation therapy for the treatment of chronic heart failure and said it intends to launch in Europe “in coming weeks.”
Sorin, too, has seen much success in the area, announcing recently that it has seen the first successful implants of its Equilia Vagus Nerve Stimulation system for heart failure patients.
“NewCo is expected to benefit from the developing market for active implantable treatments for sleep apnea with investments aimed at the under-addressed obstructive sleep apnea (OSA) market, and also in central sleep apnea (CSA), recently launched in selected European countries,” said the company in a statement.”
BioSpace Temperature Poll
Analyst Mark Schoenebaum, a biotech and pharmaceuticals analyst and medical doctor for ISI Group Evercore, has been running a Best Hair in Biopharma contest for several months now. So far, the candidates are Bristol-Myers Squibb Company‘s John Elicker, Receptos’ Chief Executive Officer Faheem Hasnain, Celgene‘s Vice President of Investor Relations Patrick Flanigan and Acorda Therapeutics’ Ron Cohen.
We want to know what our BioSpace community thinks: Who do you believe actually has the Best Hair in BioPharma?
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