Medical technologies major
C. R. Bard, Inc.
) entered a definitive agreement to acquire a leading developer
and supplier of plant based hemostatic agents Medafor, Inc. C. R.
Bard has agreed to purchase the privately-held company for $200
million at a closing date later this year, In addition, BCR will
provide future contingent payments up to $80 million based on
revenue-based milestones through Jun 30, 2015.
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The transaction is formed as a merger and has been approved by
boards of directors of both the companies. However, it is subject
to an approval by Medafor's shareholders and customary regulatory
The acquisition will help Bard gain access to a proprietary
technology platform and expand its global footprint. It will
boost the company's surgical specialties portfolio (particularly
surgical hemostats) in its Davol subsidiary.
Medafor has many promising future products in the pipeline. C.R.
Bard expects the acquisition to contribute about 1% to revenue
growth in 2014, and a few cents to adjusted earnings per share in
2013 but neutral to 2014.
Medafor is famous for its Arista MPH Hemostat agent, which
controls bleeding and reduce hemorrhage when conventional means
become ineffective or impractical. Arista is a plant-based
platform using Microporous Polysaccharide Hemospheres technology
that has been proved to be safe, effective and convenient to use
in many surgical procedures.
Surgical hemostats provide greater visibility of the surgical
site and reduce postoperative complications and the potential for
costly transfusions. Currently, the global market for surgical
hemostats is over $1.4 billion.
C.R. Bard reported adjusted earnings of $1.42 per share in the
second quarter of the year and beat the Zacks Consensus Estimate
by 4 cents. Revenues increased 2% (3% at constant exchange rate
or CER) on a year-over-year basis to $759.9 million and surpassed
the Zacks Consensus Estimate of $751 million.
BCR expects revenue growth in the range of 1%-3% at CER,
excluding any royalties from the Gore litigation in the third
quarter of 2013. The company expects adjusted earnings in the
range of $1.37 to $1.41 a share in the quarter.
Currently, BCR carries a Zacks Rank #3 (Hold). Other medical
stocks that are worth considering include
Alphatec Holdings, Inc.
The Cooper Companies Inc.
Align Technology Inc.
). They carry a Zacks Rank #2 (Buy).