Sunshine Heart (SSH) Acquires Baxter's (BAX) Aquadex Product Line; Enters New Credit Facility
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Sunshine Heart, Inc. (Nasdaq: SSH) announced it has acquired the Aquadex product line from an indirect subsidiary of Baxter International Inc. (NYSE: BAX), a global leader in the hospital products and dialysis markets. The Aquadex system is indicated for temporary (up to eight hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy, and extended (longer than 8 hours) ultrafiltration treatment of patients with fluid overload who have failed diuretic therapy and require hospitalization.
“Aquadex is an important strategic investment, which allows Sunshine Heart to strengthen our presence in the heart failure market,” said John Erb, Sunshine’s Chairman and CEO. “We believe Aquadex is a valuable and highly complementary technology to our expanding heart failure product portfolio. There is a real need for fluid management in patients both before and following any kind of heart failure procedure. Aquadex is used to treat fluid overload in congestive heart failure patients and can help reduce the length of stay while in the hospital and the number of hospital visits in total.”
Under the terms of the agreement, Baxter received $4.0 million in cash and 1.0 million shares of Sunshine Heart common stock. “This is a financially attractive transaction as well,” said Mr. Erb. “We expect this product line to be accretive in the first year with a relatively quick payback period. We plan to strategically leverage our current team of clinical specialists to directly support the existing base of Aquadex customers.”
In connection with the acquisition of this product line, the Company repaid all amounts outstanding under its existing debt facility with Silicon Valley Bank and entered into a new $5.0 million facility to finance future working capital needs. Advances under the facility are subject to various conditions precedent, including compliance with financial covenants, which the Company does not currently meet. “This strategic acquisition will allow Sunshine Heart to further drive important advancements to heart failure treatment,” said Ben Johnson, Managing Director of Silicon Valley Bank. “We’re excited to provide the financing to support the company as it matures to the next phase of development.”
Rx Only. All treatments must be administered by a healthcare provider, under physician prescription, both of whom having received training in extracorporeal therapies
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