Greatbatch to buy out Lake Region Medical for $1.7B

Greatbatch (NYSE:GB) said today that it agreed to acquire Lake Region Medical for $1.73 billion in cash and stock.

Terms call for Frisco, Texas-based Greatbatch to pay $478 million in cash and some 5.1 million shares of stock (which closed yesterday at $49.89 per share, making that portion of the offer worth another $254.4 million). Greatbatch said it also agreed to assume $1 billion worth of Wilmington, Mass.-based Lake Region Medical’s debt.

If consummated as expected during the 4th quarter, the deal would create an OEM juggernaut in the medical device space, about a year after Lake Region merged with Accellent last year. The buyout would leave Greatbatch stockholders with about 83.4% of the combined company and Lake Region Medical shareholders with the remaining 16.6%, the companies said.

“The combination of Greatbatch and Lake Region Medical brings together 2 highly complementary organizations that can provide a new level of industry leading capabilities and services to OEM customers while building value for shareholders,” Greatbatch president & CEO Thomas Hook said in prepared remarks. “Through this transformative deal, we are going to be at the forefront of innovating technologies and products that help change the face of healthcare, providing our customers with a distinct advantage as they bring complete systems and solutions to market. In turn, our customers will be able to accelerate patient access to life enhancing therapies.”

“I am very proud of the Lake Region Medical team and what they have accomplished over many years,” added Lake Region chairman & CEO Donald Spence. “Today marks the start of an important new chapter for the company and I am confident the combination of Lake Region Medical and Greatbatch will form an even stronger entity with unmatched technology and manufacturing capabilities to better serve our customers into the future.”

“We expect considerable operating synergies resulting in sustained profitable growth, as well as double-digit adjusted cash EPS growth,” Greatbatch CFO Michael Dinkins said.

The companies posted combined revenues of about $1.5 billion last year. Greatbatch said it expects the deal to add to its earnings per share at a double-digit clip next year, with net synergies worth $25 million of operating profits. That figure is expected to rise to $60 million in 2018, the company said.

Greatbatch to buy out Lake Region Medical for $1.7B

Greatbatch agrees to acquire Lake Region Medical, formerly Accellent, for $1.73 billion in cash and stock.

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Cardinal Health to buy NaviHealth for $410m

Cardinal Health (NYSE:CAH) said it paid $290 million for a majority stake in post-acute care management firm NaviHealth, in a 4-year deal worth $410 million.

The $290 million payout gives Dublin, Ohio-based Cardinal a 71% share in NaviHealth, the company said. NaviHealth’s Brentwood, Tenn.-based management team will continue to lead the business and principal investor Welsh, Carson, Anderson & Stowe will hold on to its stake, Cardinal Health said.

NaviHealth serves nearly 2 million health plan members and mroe than 75 partner hospitals and physician groups, the company said.

“Discharge and post-acute care coordination is critical for both hospital CEOs and their patients, as care is increasingly delivered in alternative sites and payment models shift the focus to patient outcomes rather than activity,” Cardinal Health at Home president Michael Petras said in prepared remarks. “The acquisition of naviHealth aligns with Cardinal Health’s strategic priority of offering the most complete and integrated suite of services to meet the needs of our Integrated Delivery Network, hospital and other customers.”

“As one of the most trusted companies in health care, we believe Cardinal Health represents an ideal owner of naviHealth as we continue to focus on our mission of improving outcomes across the post-acute care continuum,” added NaviHealth CEO Clay Richards. “Bolstered by Cardinal Health’s unmatched distribution channel and diverse suite of clinical products and services, we believe that we have the opportunity to significantly accelerate the growth of our business and expand our value proposition for our partners.”

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Abbott denies St. Jude Medical buyout report

bbottAbbott (NYSE:ABT) today denied reports that it’s prepping a $25 billion offer for St. Jude Medical (NYSE:STJ), but the rumor nevertheless propelled STJ shares up YY% this morning.

Investors were sparked by a Financial Times report of the potential offer. Abbott is working with banks on a cash-and-stock proffer, the newspaper report, citing people familiar with the situation. A deal between Abbott and St. Jude, which already jointly sell their cardiovascular products, would give the new entity stronger ground in negotiations with hospital customers, the newspaper reported.

An Abbott spokesman told Bloomberg that the FT report is wrong, but declined to say whether the company is raising money for other deals.

Early trading pushed STJ shares up 17%, but the stock had fallen back to $73 even by about 9:20 this morning on Wall Street, still a 5.3% gain.

St. Jude is in the middle of its own multi-billion merger, a $YY billion merger with implantable heart pump maker Thoratec (NSDQ:THOR).

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Business groups call for probe of medical funding in pelvic mesh cases

(Reuters) — Two business lobbying groups this week called on the Consumer Financial Protection Board to investigate the medical funding industry, after a Reuters investigation revealed that private investors are funding operations for women who have sued makers of pelvic mesh implants.

The American Tort Reform Assn. and DRI-The Voice of the Defense Bar told Reuters this week that medical funders take advantage of the people they claim to be helping.

The U.S. Chamber of Commerce, another proponent of business-friendly tort reform, said in a statement that medical funding is “a blatant abuse of the system” that leaves “actual victims with little or no recovery.”

Medical funders profit by purchasing bills for the medical treatment of injured plaintiffs at a deep discount from health care providers, then claiming the full amount of the bill as a lien against the patient’s legal recovery through a settlement or verdict.

At least several hundred women in the sweeping litigation against manufacturers of so-called pelvic mesh, used to treat incontinence and other conditions, relied on medical funders to pay for surgery to remove their implants. Liens by funders in mesh cases can spiral to as much as 10 times what health insurers would pay for the same procedures.

“This is predatory lending – exactly what the CFPB was designed to prevent,” DRI president John Sweeney said in an interview.

A spokeswoman for the CFPB, a federal agency established to combat financial industry abuses, declined to comment.

Medical lender Daniel Christensen of Austin-based MedStar Funding said in an email that industry participants are subject to certain state commercial or lending laws. He said patients’ attorneys also provide oversight.

“I am not in favor of regulation,” said Christensen, whose medical funding network was described in the Reuters investigation. “I am in favor of a person’s right to contract. If they want to take a settlement advance or if they want to obtain medical care on a lien, they should have the right to do so without the government telling them otherwise.”

Christensen said funders earn high rates of return because “litigation finance is an extremely risky endeavor.”

It is disingenuous, he said, for business groups such as the U.S. Chamber to express concern for plaintiffs. The groups oppose his industry “not because they suddenly developed a sense of altruism, but because eliminating litigation funding is in the best interests of those who fund them – big business and insurance.”

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Edwards Lifesciences closes $400m CardiAQ Valve buyout

Edwards Lifesciences (NYSE:EW) said yesterday that it closed the $400 million buyout of CardiAQ Valve Technologies and its transcatheter mitral valve implant.

The deal for CardiAQ Valve, which like Edwards is based in Irvine, Calif., included an up-front payment of $350 million in cash and another $50 million pegged to “achievement of a European regulatory milestone,” Edwards said.

Edwards is also pursuing its own TMVI program, built on the Fortis platform. When it announced the CardiAQ Valve deal last month, the company said it also reached a deal with the investigators in its Fortis trial for changes to study’s protocol, after blood clots in some of the 20 patients implanted with the device prompted a temporary halt for the trial in May.

“We look forward to the CardiAQ team joining Edwards. We believe the combined knowledge and efforts of the talented CardiAQ and Fortis transcatheter mitral valve system teams will help us advance a therapy that offers a meaningful solution for patients,” chairman & CEO Michael Mussallem said yesterday in prepared remarks.

In April, CardiAQ won an investigational device exemption from the FDA for a 20-patient feasibility trial of its as-yet-unnamed TMVI candidate, with a protocol calling for 10 subjects to be treated transfemorally and another 10 treated via the transapical approach.

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Vertebral Technologies inks China distro deal

Vertebral Technologies Inc said today it inked a deal with Chinese medical device company ECM Medical to distribute VTI’s Interfuse spinal implant system in China.

VTI’s Interfuse is an interbody lumbar fusion system that allows for less invasive approaches to lumbar fusion operations due to smaller access channels and intra-operative assembly, the Minnetonka, Minn.-based company said.

“While our products have approval in 38 markets worldwide, China is a key market. We are excited that our technologies will be available to surgeons and patients in China,” VTI CEO Matt Kyle said in a press release.

The initial Chinese launch will take place in Hong Kong and Macau in the 4th quarter of this year, VTI said, and will follow to mainland China after the company receives regulatory approval.

“Orthopedic implants are a key area in our product portfolio and the Interfuse system offers unique benefits over other fusion products. ECM is pleased to be partnering with VTI to bring a next generation fusion implant to the China market,” ECM U.S. veep Brian Hakim, said in prepared remarks.

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MocaCare raises $2m in Series A for handheld heart monitor

Recently established mobile health company MocaCare said today they raised $2 million in a Series A round for its Mocaheart handheld consumer health monitor.

Leading the round of financing was JDM Mobile Internet Solutions, joined by EBM International and ATOM health corp.

The round follows a seed-funding Kickstarter campaign that brought in $120,000 for early development of the monitor, the Palo Alto, Calif.-based company said.

“The capital and strategic resources provided by the investment partnerships will take the Mocaheart device to a whole new level. We have seen extremely strong interest in Mocaheart from the investment and medical community and look forward to bringing it to consumer audiences,” co-founders Dr. Daniel Wei-Chen Hong said in a press release.

Funding is slated to support the domestic and international launch of the company’s device, which is scheduled to begin shipping next month.

The device is designed to scan fingertips to measure multiple metrics, including heart rate, blood oxygen level and blood velocity, according to MocaCare.

“$47.5 billion is spent annually on costs associated with high blood pressure, affecting 67 million American adults. There is an opportunity around the world to simplify the monitoring of cardiovascular health and we’re excited to invest in MocaCare that is well placed to power this resource to consumers and medical professionals,” EMB International’s Steve Huang said in prepared remarks.

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