Merit Medical Systems, Inc. (NASDAQ: MMSI) has announced the signing of a definitive asset purchase agreement with Pentax of America, Inc., a subsidiary of Pentax Medical, Inc., to acquire the C2 Cryoballoon™ device and related technology. The proposed acquisition is expected to close during the fourth quarter of 2025, subject to customary closing conditions.
The financial details of the transaction include a total purchase consideration of $22 million, with a $19 million cash payment at closing and potential contingent payments of up to $3 million 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.
For the twelve months ending December 31, 2026, the acquisition is expected to contribute revenue in the range of approximately $6 million to $8 million. 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. The proposed acquisition is also expected to be dilutive to Merit’s full-year 2025 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 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. In terms of GAAP metrics, the acquisition is projected to be dilutive to Merit’s GAAP net income and GAAP earnings per share in the range of approximately $2 million to $3 million, or $0.03 * $0.05 per share, respectively.
It is important to note that the company has highlighted that the non-GAAP net income and non-GAAP earnings per share are non-GAAP financial measures, and a quantitative reconciliation of the impacts on such financial measures to the impacts on comparable GAAP financial measures is not available without unreasonable effort.
The proposed acquisition is anticipated to expand Merit’s endoscopy portfolio and provide opportunities to treat more patients suffering from chronic gastroesophageal reflux disease (GERD) and other gastrointestinal tissue disorders. The C2 Cryoballoon™ device is designed to deliver controlled freezing treatments to drive targeted ablation and precise destruction of unwanted soft tissue, providing a potential solution for patients suffering from Barrett’s esophagus and other gastrointestinal disorders.
This acquisition aligns with Merit’s commitment to advancing minimally invasive solutions for gastrointestinal disorders and is expected to strengthen the company’s position in the gastroenterology market. As part of the integration process, Merit plans to transfer product manufacturing to its facility in South Jordan, Utah, and anticipates that some of the Pentax employees currently engaged in the C2 Cryoballoon business will be joining Merit.
Founded in 1987, Merit Medical Systems, Inc. is engaged in the development, manufacture, and distribution of proprietary medical devices used in interventional, diagnostic, and therapeutic procedures. On the other hand, Pentax Medical, a division of the Hoya Group, is a global player in flexible, reusable endoscopy solutions, committed to delivering intuitive, flexible endoscopy solutions that empower healthcare professionals to provide outstanding care.
This acquisition is a strategic move for Merit Medical Systems, Inc. as it seeks to expand its presence in the gastroenterology market and provide innovative solutions for patients suffering from gastrointestinal disorders. 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. For the full picture, make sure to review MERIT MEDICAL SYSTEMS INC's 8-K report.
