Merit Medical Systems, Inc. has announced the signing of a definitive asset purchase agreement with Pentax of America, Inc. to acquire the C2 Cryoballoon™ device and related technology. The proposed acquisition is expected to strengthen Merit's position in the gastroenterology market, providing opportunities to treat more patients suffering from chronic gastroesophageal reflux disease (GERD) and other gastrointestinal tissue disorders.
Financially, the total purchase consideration for the C2 Cryoballoon assets is $22 million, with a $19 million cash payment at closing and potential contingent payments of up to $3 million payable upon meeting certain milestones. The acquired assets are projected to contribute revenue of approximately $1 million from the projected closing date of November 1, 2025, through December 31, 2025. However, during the same period, it is projected to dilute Merit’s previously forecasted non-GAAP net income and non-GAAP earnings per share by approximately $0.4 million and $0.01, respectively.
For the full year 2025, the acquisition is projected to be dilutive to Merit’s GAAP net income and GAAP earnings per share by approximately $0.5 million and $0.01, respectively. Looking ahead, the proposed acquisition is projected to contribute revenue in the range of approximately $6 million to $8 million for the twelve months ending December 31, 2026. It is expected to be dilutive to Merit’s non-GAAP net income and non-GAAP earnings per share in the range of approximately $1 million to $2 million, or $0.02 * $0.03 per share, respectively, and to be accretive thereafter.
However, it is important to note that non-GAAP net income and non-GAAP earnings per share are non-GAAP financial measures. A quantitative reconciliation of the impacts on such financial measures to comparable GAAP financial measures is not available without unreasonable effort.
The proposed acquisition is set to expand Merit’s endoscopy portfolio with an innovative device to treat patients suffering from Barrett’s esophagus and other gastrointestinal disorders. The C2 Cryoballoon technology delivers controlled freezing treatments to drive targeted ablation and precise destruction of unwanted soft tissue, enabling the treatment of Barrett’s esophagus and gastric antral vascular ectasia (GAVE) syndrome.
In terms of the team, Merit plans to transfer product manufacturing to its facility in South Jordan, Utah, and intends to have some of the Pentax employees currently engaged in the C2 Cryoballoon business join Merit, bringing their knowledge and expertise to the team.
The acquisition of the C2 Cryoballoon assets is projected to expand Merit’s footprint in the multibillion-dollar gastroenterology market, providing physicians with more options to help care for their patients. As a result of these announcements, the company's shares have moved 0.42% on the market, and are now trading at a price of $80.81. If you want to know more, read the company's complete 8-K report here.
