AtriCure closes $99m nContact buy

AtriCure (NSDQ:ATRC) said yesterday that it closed the $99 million cash-and-stock buyout of cardiac ablation device maker nContact.

Morrisville, N.C.-based nContact makes a system that’s designed to combine vacuum suction, perfusion and radiofrequency ablation to improve contact between cardiac tissue and the device. The company is running a U.S. investigational device exemption trial, comparing its Convergent procedure using the Epi-Sense coagulation system with VisiTrax to catheter ablation in treating persistent atrial fibrillation. The system has CE Mark approval in the European Union for treating atrial fibrillation and atrial flutter.

In early 2013, nContact said it won FDA clearance for modifications to the device.

The acquisition called for AtriCure to pay $8 million in up-front cash and 3.7 million ATRC shares at $24.60 apiece, plus up to $50 million in additional milestones based on completing enrollment of the Converge IDE trial and winning PMA approval.

“nContact is an excellent strategic addition to AtriCure, as it expands and strengthens our presence in the Afib market. We expect the combined entity to provide improved market access and additional collaboration opportunities with cardiac surgeons and electrophysiologists. This acquisition reinforces our commitment to the Afib market, product innovation and clinical science. We are excited to be able to offer this therapy to our combined customer base, further the CONVERGE IDE trial, and continue our mission to grow the market with new solutions,” AtriCure CEO Mike Carrel said when the deal was announced earlier this month.

Leerink Partners analyst Danielle Antalffy said that the nContact purchase was important for AtriCure because it removes a potential competitive threat, shores up AtriCure’s minimally invasive business and could shorten the PMA pathway for a “transdiaphragmatic approach” for AtriCure’s in-house technologies.

AtriCure raised its long-term sales guidance after the buy to 18% from a previous 15%, Antalffy reported.

ATRC shares are off -18.5% since the Oct. 5 announcement of the nContact acquisition.

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