AngioDynamics Inks Deal to Purchase Vortex Medical

Albany, N.Y.-based AngioDynamics, a provider of minimally invasive devices for vascular access, will acquire Vortex Medical Inc., a privately held company that develops medical devices for the removal of blood clots from blocked blood vessels.

Based in Norwell, Mass., Vortex sells its AngioVac system, which includes the AngioVac cannula and circuit. These two disposable devices, when combined with other manufacturers’ filters, pumps and return cannula, comprise an extracorporeal bypass circuit designed for drainage, filtration and reinfusion of blood for up to six hours. The AngioVac cannula has a proprietary balloon-actuated, expandable, funnel-shaped distal tip that reportedly enhances flow, prevents clogging of the cannula and facilitates en bloc (whole) removal of undesirable intravascular material. Both the AngioVac cannula and circuit are U.S. Food and Drug Administration-cleared, and an application has been filed for CE Mark approval in the European Union.

The terms of the purchase agreement are that AngioDynamics will acquire all the outstanding capital stock of Vortex Medical for $15 million in cash at closing, subject to adjustment, plus future earn-out payments based on net sales of the AngioVac system over a 10 year period and payable in cash. AngioDynamics will make a guaranteed minimum earn-out payment of approximately $8 million per year for each of the first five years. After the fifth year, AngioDynamics may make annual earn-out payments depending on the level of net sales of the AngioVac system.

“The AngioVac system has the potential to become a gold standard of care,” said Joseph M. DeVivo, president and CEO of AngioDynamics. “Unlike currently available pharmacomechanical alternatives, the minimally invasive, en bloc removal of intravascular material has the potential to reduce the risk of complications associated with major open surgery, internal bleeding and clot fragmentation. We believe the AngioVac system presents opportunities for wide anatomical application, and has the potential to significantly improve patient outcomes and to reduce the overall cost of providing treatment. Within five years, we believe AngioVac has the potential to achieve more than $50 million of annual net revenue.”

AngioDynamics intends to bolster its peripheral vascular product portfolio with this acquisition. Products AngioDynamics currently produces include the NAMIC line of fluid management products, VenaCure EVLT System, and a line of thrombolytic catheters for catheter directed thrombolysis—the Uni-Fuse, SpeedLyser and PulseSpray catheters.

“We believe AngioDynamics to be the ideal partner for the AngioVac system,” added Michael Glennon, founder and CEO of Vortex Medical. “AngioDynamics has demonstrated their ability to successfully commercialize innovative vascular solutions, and we believe AngioVac will be highly synergistic with AngioDynamics’ full complement of other venous and angiographic products.”

The acquisition of Vortex Medical is expected to close by the end of October. In fiscal year 2013, the acquisition is expected to add approximately $1 million in sales, reduce operating income by approximately $5 million.