US-based minimally-invasive medical device developer AngioDynamics has entered into a deal to purchase UK-based medical device company Microsulis Medical's microwave ablation system.
Designed for use under the skin, the CE-marked and FDA-approved Accu2i pMTA microwave ablation system uses a single, high-power, high-frequency 2.45GHz saline-cooled needle for the coagulation of larger soft tissue.
AngioDynamics said that the company has held the purchase option since March 2012 as part of a $5m equity investment in Microsulis.
The initial agreement provided AngioDynamics with exclusive distribution rights to market and sell the microwave ablation system in all markets outside the US from May 2012 until the end of 2013.
Under the terms of the transaction, AngioDynamics will initially pay $10m in cash to Microsulis, followed by a $5m cash payment at the end of 2013.
The US-based firm, which will assume up to $1m of liabilities upon the completion of transaction, will also pay additional cash to Microsulis' stakeholders based on its performance over the next nine years.
AngioDynamics president and chief executive officer Joseph DeVivo said the acquisition reinforces the company's position in the $250m global tissue ablation market.
"Our thermal ablation business, which generated $23 million of global sales in fiscal year 2012, has been flat over the last three years," DeVivo said.
"With the addition of microwave, we expect sales to grow an average of 20% annually over the next three years at margins that are nicely accretive to our overall business.
"We look forward to launching the second generation Accu2i pMTA applicator in the US shortly after the transaction closes."
The transaction, which is expected to be neutral to the AngioDynamics' fiscal 2013 non-GAAP earnings and accretive to fiscal 2014 non-GAAP earnings, is subject to customary conditions and will be closed by the end of January 2013.