US-based HeartWare International has signed an agreement to acquire Israel’s privately held company Valtech Cardio.
Valtech is involved in the development of new surgical and transcatheter valve repair and replacement devices, including mitral valve regurgitation (MR) and tricuspid valve regurgitation (TR).
The majority of MR and TR patients also suffer from advanced heart failure, and the progression of heart failure can accelerate considerably as a result of valvular dysfunction.
The company noted that patients with advanced heart failure who receive a ventricular assist device (VAD), such as its HVAD system, commonly undergo a concomitant, therapeutic mitral or tricuspid valve procedure.
As part of the deal, Valtech shareholders will secure an up-front consideration of 4.4 million shares of HeartWare common stock, as well as 800,000 shares of HeartWare common stock based on CE mark approval of the Cardioband device.
In addition, Valtech will receive a further 700,000 shares of HeartWare common stock based on first-in-man implants for either Cardioband tricuspid or CardioValve.
The deal also includes warrants to buy 850,000 shares of HeartWare common stock at an exercise price of $83.73 per share exercisable upon attainment of $75m in net sales of Valtech products and an earn-out payment of $375m upon attainment of $450m of net sales.
HeartWare International president and CEO Doug Godshall said: "We have been actively monitoring the mitral space for several years, given the overlap of patient population and referral channel with our VAD business.
"We identified Valtech as having the broadest, most compelling portfolio several years ago, which led to an investment in 2013.
"This combination represents an attractive opportunity for value creation for HeartWare shareholders, customers, employees, and patients by expanding HeartWare’s footprint in the high-growth structural heart market."
Valtech’s product portfolio is comprised of Cardioband for mitral and tricuspid repair and Cardinal, which received CE mark approval for mitral repair.
The company has also developed CardioValve, a transcatheter mitral valve replacement (TMVR) system with 5° of steering maneuverability, as well as V-Chordal, a surgical and interventional chord replacement system for MR repair.
The transaction, which is subject to regulatory approvals, is expected to be completed by the end of this year.