Ev3 Agrees to Acquire Chestnut Medical for up to $150M

Ev3 Inc., a global endovascular device company, has agreed to purchase Chestnut Medical Technologies Inc., a privately held Menlo Park, Calif., firm that develops minimally invasive therapies for interventional neuroradiology.

The transaction will broaden ev3’s neurovascular product portfolio by adding the Pipeline Embolization Device for the treatment of cerebral aneurysms and the Alligator Retrieval Device for foreign body retrieval to ev3’s existing embolic product and access technologies.

Under the terms of the agreement, ev3 will acquire 100 percent of the equity interest of Chestnut for total upfront consideration of $75 million paid upon closing, 30 to 40 percent of which is payable in cash, with the remaining portion payable in ev3 common stock.

An additional milestone-based contingent payment of up to $75 million will be payable in a combination of cash and ev3 common stock upon the receipt of U.S. Food and Drug Administration (FDA) premarket approval of the Pipeline device.

Chestnut’s Pipeline technology diverts blood flow away from the aneurysm in order to provide aneurysm embolization, while maintaining patency of the parent vessel. It has already received CE Mark approval in Europe and is currently conducting two clinical studies under FDA investigational device exemptions to gain approval for the Pipeline Embolization Device in the United States.

Robert Palmisano, president and chief executive officer of ev3, said, “This acquisition directly supports our stated strategy of bringing breakthrough neurovascular therapies to our markets and adds an innovative new product platform to benefit the large number of patients suffering from brain aneurysms that currently are not well treated with either surgical or endovascular techniques. In addition, this acquisition is expected to be an immediate revenue contributor, leverage the strong global distribution capabilities of ev3’s neurovascular sales organization and provide another growth engine for delivering enhanced value to our shareholders.”

Dr. Aaron Berez, president and chief executive officer of Chestnut, added, “Chestnut Medical is delighted to partner with ev3 with whom we share a deep commitment to providing the minimally invasive tools that improve patient outcomes. We believe that our Pipeline technology is changing the way aneurysms are treated, and that ev3 with its broad global footprint is the ideal partner to accelerate the rapid diffusion of our products around the world.”