CryoLife (CRY) to Acquire Hemosphere in $21.3M Deal
Tweet
Share
E-mailGet Alerts CRY Hot Sheet
Join SI Premium – FREE
CryoLife, Inc. (NYSE: CRY), has signed a definitive agreement to acquire Hemosphere, Inc., a privately-held medical device company that has developed and markets the HeRO (Hemodialysis Reliable Outflow) Graft. The HeRO Graft is a proprietary graft-based solution for end-stage renal disease (ESRD) hemodialysis patients with limited access options and central venous obstruction.
Under terms of the agreement, CryoLife will acquire Hemosphere for $17.0 million in cash, plus potential revenue milestone-based payments of up to $4.5 million. CryoLife intends to use cash on hand to finance the transaction, which is expected to close in May. The transaction is subject to customary closing conditions. Hemosphere's revenues were $5.3 million and gross margins were 65.6 percent for the full year 2011.
Assuming the transaction closes in May as anticipated, the Company expects revenues of between $2.5 million and $3.5 million for the Hemosphere product line in 2012. The Company expects to incur between $0.09 and $0.10 per share in charges in 2012 related to the acquisition of Hemosphere, which includes non-recurring transaction and integration charges of between $0.06 and $0.08 per share, with between $0.04 and $0.05 per share of those estimated transaction and integration charges to occur during the second quarter. The Company anticipates that the transaction will be slightly dilutive to earnings to break even for 2013. The above per share charges assume a 35 percent income tax rate. However, due to the non-deductibility of certain transaction expenses, the Company expects its income tax rate in the second quarter of 2012 to be higher than 35 percent.
Under terms of the agreement, CryoLife will acquire Hemosphere for $17.0 million in cash, plus potential revenue milestone-based payments of up to $4.5 million. CryoLife intends to use cash on hand to finance the transaction, which is expected to close in May. The transaction is subject to customary closing conditions. Hemosphere's revenues were $5.3 million and gross margins were 65.6 percent for the full year 2011.
Assuming the transaction closes in May as anticipated, the Company expects revenues of between $2.5 million and $3.5 million for the Hemosphere product line in 2012. The Company expects to incur between $0.09 and $0.10 per share in charges in 2012 related to the acquisition of Hemosphere, which includes non-recurring transaction and integration charges of between $0.06 and $0.08 per share, with between $0.04 and $0.05 per share of those estimated transaction and integration charges to occur during the second quarter. The Company anticipates that the transaction will be slightly dilutive to earnings to break even for 2013. The above per share charges assume a 35 percent income tax rate. However, due to the non-deductibility of certain transaction expenses, the Company expects its income tax rate in the second quarter of 2012 to be higher than 35 percent.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Walmart (WMT) PT Lowered to $130 at UBS on Investment Narrative's Competing Dynamics
- DA Davidson Reiterates Buy Rating on Box, Inc. (BOX) on Secular Tailwinds for Demand
- LivePerson extends special meeting deadline for SoundHound AI merger vote
Create E-mail Alert Related Categories
Mergers and AcquisitionsRelated Entities
EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
