ArthroCare Corporation (ARTC), a maker of less invasive surgical products, recently revealed that it has concluded the acquisition of ENTrigue Surgical, Inc. in a cash transaction.
The purchase price, based on the merger agreement, was $45 million subject to working capital modifications as well as adjustment for an escrow amount. The former stockholders of ENTrigue will be eligible to receive contingent amounts for the next five years. ENTrigue was a closely held corporation.
Piper Jaffray & Co. was the financial advisor for ArthroCare and DLA Piper was its legal advisor. J.P. Morgan Securities LLC functioned as financial advisor while Norton Rose Fulbright acted as legal advisor to ENTrigue.
ENTrigue brings to market novel instruments and implants for surgery including balloon dilation. Following the acquisition, it will function as a part of ArthroCare’s ENT expertise. ENTrigue will provide traction to Rapid Rhino and ArthroCare Coblation offerings required in surgery for sinusitis, which are utilized by ENT surgeons globally.
It is estimated that over 30 million people in the U.S. are afflicted by sinusitis. The condition is marked by infection and inflammation of the sinuses. About half a million patients of sinusitis receive surgical treatment in the U.S. every year.
ArthroCare produces implants and devices which improve surgical procedures and enhance outcomes. Its offerings permit less invasive operations. Certain ArthroCare offerings utilize its globally patented Coblation expertise.
Furthermore, ArthroCare is bringing to market instruments that use its patented Opus expertise. ArthroCare’s strategy is to derive synergies by providing a complete set of surgical items, which will permit it to tap a large market.
The stock carries a Zacks Rank #4 (Sell). We are more optimistic about The Cooper Companies Inc. (COO), Align Technology Inc. (ALGN) and CONMED Corporation (CNMD) each of which carries a Zacks Rank #2 (Buy) and are expected to do well.
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