), a provider of therapeutic and diagnostic devices for the
treatment of peripheral vascular and other non-coronary diseases,
completed its previously announced acquisition of certain assets
of Mircosulis Medical Ltd. for $15 million.
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According to the agreement, Microsulis' leading Accu2i pMTA
microwave ablation technology will now be a part of
AngioDynamics' portfolio. The company will also gain the
exclusive worldwide distribution rights for the technology.
Further, AngioDynamics expects to introduce the second generation
Accu2i pMTA applicator in the domestic market.
Denmead, England-based Microsulis specializes in minimally
invasive, microwave ablation technology for the coagulation of
soft tissues. The medical device company has successfully
installed its systems in over 80 hospitals across the globe.
Microsulis manufactures Accu2i pMTA microwave ablation system
with regulatory clearances in the U.S. as well as in Europe. In
Dec 2012, the company's upgraded Accu2i pMTA applicator also
received the 510(k) clearance from the U.S. Food and Drug
Earlier, in Mar 2012, AngioDynamics and Microsulis entered into a
strategic partnership wherein the former gained the exclusive
overseas distribution rights for the latter's Accu2i pMTA
microwave ablation system from May 2012 to Dec 2013. The
agreement granted AngioDynamics the exclusive option to purchase
all the global assets and certain liabilities of Microsulis until
AngioDynamics made an upfront payment of $10 million. The company
will utilize the cash on hand to pay the remaining $5 million on
Dec 31, 2013. It will also assume up to $1 million of liabilities
of Microsulis. Further, stakeholders at Microsulis might be
entitled to earn-out payments based on its performance over the
next 9 years.
The acquisition is expected to be neutral to AngioDynamics'
adjusted earnings for fiscal 2013. However, the deal will create
value for the company's shareholders with considerable accretion
to fiscal 2014 adjusted earnings.
Following the acquisition, AngioDynamics will serve a market size
of $250 million for tissue ablation systems. The company expects
to emerge as a pioneer in the global tissue ablation market.
We view the acquisition in a positive light based on
AngioDynamics' successful partnership with Micrusulis. The
company's thermal ablation business has been stagnant for the
past three years. In fiscal 2012, revenues from this franchise
stood at $23 million. The company expects significant revenue
synergies from the latest deal, which is reflected in its annual
growth forecast of 20% over the next 3 years.
Moreover, the buyout is in line with the company's strategy to
grow on the back of acquisitions and strategic alliances.
AngioDyanmics' aggressive acquisition strategy targets
high-growth areas. In Oct 2012, the company acquired Vortex
Medical and its coveted Food and Drug Administration
(FDA)-approved Angiovac technology to boost the peripheral
vascular product portfolio.
The company's current focus on the promising oncology market
should yield positive results. The stock carries a Zacks Rank #3
(Hold). While we prefer to remain on the sidelines on
AngioDyanmics, other medical stocks such as
) with Zacks Rank #1 (Strong Buy) are worth considering.