AngioDynamics to Acquire Navilyst Medical for $372 Million

Medical device maker AngioDynamics is buying privately held Navilyst Medical Inc. in a $372 million deal that will double its share of the vascular access market.

Vascular access devices are tubes that are surgically implanted into a large vein for extended periods of time and help in blood transfusion and delivering antibiotics and nutrition.

Marlborough, Mass.-based Navilyst Medical, which generated sales of $149 million in 2011, was bought by private equity firm Avista Capital Partners from Boston Scientific in 2008. Its products are used in 76 countries by healthcare providers, including interventional radiologists and cardiologists, oncologists and surgeons, according to the company’s website.

Latham, N.Y.-headquartered AngioDynamics, which drew 70 percent of its fiscal 2011 revenue from vascular devices, said it will fund the deal using $97 million of cash on hand and $150 million from a financing facility from JP Morgan, Bank of America and KeyBank National Association.

The company also will issue about 9.5 million shares of its common stock to Avista and two seats on its board of directors, AngioDynamics said. On present value, acquired tax assets reduce the effective purchase price by about $80 million to $292 million, the company said in a statement.

“The acquisition creates an excellent platform for future revenue and earnings growth, as well as substantial cash flow generation,” AngioDynamics Chief Executive Joseph DeVivo said. “The acquisition of Navilyst brings AngioDynamics scale, technology and operational excellence. “It strengthens AngioDynamics’ current business by enabling us to focus on our key channels – Vascular Access, Peripheral Vascular and Oncology/Surgery – and accelerates the ability of our global sales leaders to focus on key clinical call points. The combined company will offer a more compelling portfolio of products to our customers, allowing the sales force to be more productive and compete more effectively.”

The deal, expected to close by the fourth quarter, is expected to add at least 8 cents a share to AngioDynamics’ fiscal 2013 adjusted earnings and forecast pro forma net sales of about $360 million for that year.

J.P. Morgan Securities acted as financial advisor to AngioDynamics while Barclays Capital acted as financial advisor to Navilyst Medical.

“The combination of Navilyst and AngioDynamics brings together two leading companies, with complementary strengths and assets,” said David Burgstahler, Partner and President of Avista Capital Partners. “The combination of our two companies will be a great strategic fit and will provide greater scale as well as a more comprehensive and competitive product portfolio. The combined company is poised to drive significant value for shareholders in the near- and long-term.”

Sales from the company’s vascular devices contributed to 70 percent of the total revenue in 2011 but saw a decline of 6 percent.