Merit Medical Systems Acquires EndoGastric Solutions for $105M, Expects $30M Revenue Boost

Merit Medical Systems, Inc. has announced its acquisition of EndoGastric Solutions, Inc. for a total cash consideration of approximately $105 million. The acquired assets from EndoGastric Solutions generated approximately $26 million of revenue over the twelve-month period ended December 31, 2023. The acquisition is projected to add approximately $30 million of revenue on an annualized basis in the gastrointestinal endoscopy market.

The Esophyx Z+ device, acquired from EndoGastric Solutions, is designed to provide relief for patients suffering from gastroesophageal reflux disease (GERD) by restoring the body’s reflux barrier. The device is expected to contribute revenue in the range of $13 to $15 million from the closing date through December 31, 2024.

Financially, Merit Medical Systems, Inc. has updated its full-year 2024 financial guidance to include the projected partial-year impact from the acquisition. The company expects net sales in the range of $1.324 * $1.340 billion, representing a 5% * 7% increase from the previous year. The revenue guidance for the endoscopy segment is expected to increase by 45% * 51% to $53.3 * $55.7 million.

Additionally, the company anticipates non-GAAP earnings per share in the range of $3.22 * $3.31, reflecting a 7% * 10% increase from the prior year. The acquisition is expected to be accretive to non-GAAP gross margin, non-GAAP operating margin, non-GAAP net income, and non-GAAP earnings per share in the first full year post-closing.

The company will release its financial results for the quarter ended June 30, 2024, after the close of the stock market on Thursday, August 1, 2024, and will host a conference call at 5:00 p.m. Eastern that day.

Merit Medical Systems, Inc. is a global leader in healthcare technology, and the acquisition of EndoGastric Solutions is in line with its strategic growth initiatives, expanding its product portfolio in existing clinical specialties and the gastrointestinal market. As a result of these announcements, the company's shares have moved -0.4% on the market, and are now trading at a price of $85.64. For the full picture, make sure to review Merit Medical Systems's 8-K report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.