CryoLife Inks Deal for Cardiogenesis Corp.

@font-face { font-family: “Arial”; }@font-face { font-family: “Cambria”; }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: “Times New Roman”; }div.Section1 { page: Section1; }

Medical device maker CryoLife Inc. is buying Cardiogenesis Corp. in a deal valued at about $22 million.

CryoLife develops implantable biological medical devices, and Irvine, Calif.-based Cardiogenesis is a maker of devices used for the treatment of angina secondary to ischemic cardiac disease.The company’s laser transmyocardial revascularization (TMR) technology platform uses a holmium:YAG laser energy source applied through a range of minimally invasive fiberoptic delivery systems. The current market potential for TMR surgical procedures in the United States is estimated to be greater than $175 million. CryoLife officials believe that the delivery of biologic materials, such as stem cells, in conjunction with TMR could increase the estimated U.S. market potential to greater than $700 million.

CryoLife, based in Kennesaw, Ga., will pay 45.7 cents per share for Cardiogenesis, which is traded as an over-the-counter stock. The price marks a 43 percent premium to the closing price of 32 cents per share on Monday, April 29, the day the deal was announced.

The deal is expected to be conducted as a tender offer followed by a merger and is expected to close by late May. Following the completion of the transaction, Cardiogenesis will become a wholly owned subsidiary of CryoLife.

Cardiogenesis and CryoLife products are both targeted toward cardiovascular surgeons and this acquisition represents a significant addition to CryoLife’s cardiac surgery portfolio, CryoLife officials noted. CryoLife expects to grow TMR revenues in the low double-digits within 12 months of completing the acquisition, excluding the benefits of any possible future product approvals or successful clinical trial outcomes.

“We believe this transaction will benefit the customers, employees and shareholders of both companies,” said Steven G. Anderson, chairman, president and CEO of CryoLife. “Cardiogenesis brings developed technologies with proven clinical outcomes in the treatment of cardiovascular disease and a pipeline of potential new products that build on the TMR platform. Cardiogenesis’ products greatly expand our customer offerings and we believe they will create opportunities for us to cross sell and rollout Cardiogenesis’ products on a global platform. We look forward to welcoming Cardiogenesis employees to the CryoLife team as we work together to create opportunity for our customers and investors.”

Cardiogenesis had sales of $11.3 million in 2010.