Consolidating its earlier partnership,
) inked a definitive agreement to purchase certain assets of
Mircosulis Medical Ltd. The transaction is expected to close this
month, subject to standard conditions.
AngioDynamics will make upfront payment of $10 million along
with $5 million on Dec 31, 2013 and assume $1 million of
liabilities. On the basis of its performance over the next nine
years, stakeholders at Microsulis might be entitled to earn-out
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
According to the agreement, Microsulis' leading microwave
ablation technology will be a part AngioDynamics portfolio. The
company will also gain exclusive worldwide distribution rights
for the technology. Further, AngioDynamics expects to introduce
the second generation Accu2i pMTA applicator in the domestic
market after closing the acquisition.
Denmead, England-based Microsulis specializes in minimally
invasive, microwave ablation technology for the coagulation of
soft tissue. The medical device company has a global footprint
with its systems installed in over 80 hospitals.
Microsulis' manufactures Accu2i pMTA microwave ablation system
with regulatory clearances in the U.S. as well as Europe. In
December 2012, the U.S. Food and Drug Administration (FDA) also
granted 510(k) clearance to the company's upgraded Accu2i pMTA
Earlier, in March 2012, AngioDynamics and Microsulis entered
into a strategic partnership wherein AngioDynamics gained the
exclusive overseas distribution rights for Microsulis's Accu2i
pMTA microwave ablation system from May 2012 to December 2013.
The agreement granted AngioDynamics the exclusive option to
purchase all the global assets and certain liabilities of
Microsulis until September 2013.
AngioDynamics' thermal ablation business has been stagnant
over the last three years. In fiscal 2012, the revenues from the
franchise stood at $23 million. The company envisages significant
revenue synergies from the latest deal as reflected in the
forecast of 20% annual growth over the following three years.
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AngioDyanmics' aggressive acquisition strategy targets
high-growth areas. The company's current focus on the burgeoning
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
), which carry a Zacks Rank #1 (Strong Buy), are worth