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Cyberonics-Sorin $2.7B Deal Gets US Antitrust Go-Ahead - Analyst Blog

Neuromodulation device maker Cyberonics, Inc.CYBX , in an update on its impending merger with medical device maker Sorin S.p.A., declared that it has received the U.S. Antitrust go-ahead for the $2.7 billion deal.

According to the company, the required waiting period related to the merger, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, is over, thereby satisfying one of the key conditions required to finalize the merger transaction.

The transaction, which received unanimous approval from both the companies' boards of directors, is still subject to approval by Sorin and Cyberonics' shareholders, certain necessary regulatory clearances and other customary closing conditions. Cyberonics currently expects the deal to be completed by the end of the third quarter of calendar year 2015.

The deal, when complete, will result in the formation of a new holding company - 'NewCo'. It will be domiciled in the UK and will apply for dual-listing on NASDAQ and the London Stock Exchange (LSE).

According to Cyberonics, its decision to enter into a transformational merger with Italy-based Sorin will create a global leader in the large and growing markets for cardiac surgery, neuromodulation and cardiac rhythm management with a diversified product portfolio, combined product technologies and complementary marketing capabilities.

NewCo, the new holding company, will have several exciting opportunities focused on three multi-billion dollar product categories: heart failure, sleep apnea and percutaneous mitral valve. Particularly, in heart failure, NewCo will bring forth promising products with European market entry starting as early as 2015.

Cyberonics recently received the CE Mark for its Vitaria device for delivering autonomic regulation therapy for the treatment of chronic heart failure and followed it up with a limited market launch. Sorinon, on the other hand, has announced the first successful implant of its EquiliaVagus Nerve Stimulation system in 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 as well as central sleep apnea (CSA). The implantable devices have been recently launched in select European countries.

In addition, NewCo is expected to introduce new percutaneous mitral valve replacement/repair products with estimated initial market entry in 2017. Also, Sorin's well-established international operations should accelerate Cyberonics' epilepsy business outside the U.S. while integrating Sorin's technology expertise into the future portfolio of neuromodulation products. We believe, this transformational merger, post completion, holds solid potential to add value to investors' wealth.

Zacks Rank

Currently, Cyberonics carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical instruments sector include ABIOMED, Inc. ABMD , Luminex Corporation LMNX and Hologic Inc. HOLX . All the three stocks hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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