Symmetry Surgical Gains on Vesocclude Medical Asset Buy
Shares of Symmetry Surgical Inc. SSRG rallies 5.5% over the last couple of days after the company announced the acquisition of Vesocclude Medical’s key assets for $4 million. The transaction value also includes $2.2 million, which Symmetry will pay on achieving certain milestones related to new product development, distribution rights for new products and future acquisition clause.
Under the terms of the agreement, Symmetry Surgical is taking over Vesocclude’s product portfolio which includes titanium ligation clips and appliers, customer database and intellectual property. The ligation clips and appliers are used in surgical procedures to close tubal anatomic structures such as blood vessels or ducts.
Vesocclude’s product suite consists of several sizes of titanium clips used to close the structures through a 'push and click' cartridge system that facilitates easy loading into either open surgical or endoscopic appliers.
We believe that the deal not only expands Symmetry Surgical’s product portfolio but also extends its sales network. Reportedly, in the last 12 months, Vesocclude generated $3.2 million in revenues and $0.5 million of EBITDA. Further, addition of Vesocclude’s clientele will boost Symmetry Surgical’s customer base considerably.
In Dec 2014, Symmetry Surgical came into being, after its erstwhile parent company Symmetry Medical completed the divestiture of its OEM solutions business unit to Tecomet Inc.
In the recently completed second quarter of 2015, Symmetry Surgical reported revenues of $20.7 million, which increased almost 5% on a year-over-year basis. The company also posted EBITDA of $2.25 million and earnings of 4 cents per share in the quarter. EBITDA was lower than $2.8 million reported in the year-ago quarter and the company had reported a loss of 64 cents.
Based on the results, Symmetry Surgical raised the lower limit of its earlier revenue guidance for full-year 2015. The company now expects revenues in the range of $82 million to $84 million as compared with $80 million to $84 million. The company also projects EBITDA in the band of $8.5 million to $9.5 million, higher than the previous estimates of $8 million to $9 million.
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