Merit Medical to Purchase Thomas Medical

Merit Medical Systems Inc., a South Jordan, Utah-based maker of disposable devices in cardiology, radiology and endoscopy, is buying Thomas Medical Products Inc. in a stock purchase agreement. The deal is worth $167 million.

Thomas Medical, currently owned by GE Healthcare, is based in Malvern, Pa. The company designs and manufactures catheter-based vascular access delivery devices for diagnostic and therapeutic procedures in electrophysiology, cardiac rhythm management, interventional cardiology, and interventional radiology applications.

Thomas Medical is expected to add value to Merit’s net earnings immediately, once the ledger is adjusted for the costs of the deal. Merit officials predict that by the end of fiscal 2012 (Dec. 31), Thomas Medical will generate revenues of approximately $37 million.

“We believe this transaction will help expand our market presence into new product categories, particularly in interventional cardiology,” said Fred P. Lampropoulos, chairman and CEO of Merit. “A majority of cardiac rhythm access procedures utilize products of the nature manufactured by Thomas Medical. We believe substantial international expansion opportunities exist, especially in China, Japan, Russia and the Gulf States, as well as significant new product development opportunities based on know-how and existing intellectual property.”

Lampropoulos also pointed out that Thomas Medical’s OEM business, and that it has a “number of existing electrophysiology products that are distributed by the larger medical device companies, as well as other EP products being developed.” He added that the OEM business has “the potential to be a driver of substantial future growth.”

“We are confident this transaction will provide Thomas Medical new capabilities to maximize its opportunities in the single-use vascular access product space and enable GE Healthcare’s Cardiovascular segment to remain focused on its core strengths as a provider of total Integrated Cardiology Lab solutions,” said Tom Gentile, president and CEO of GE Healthcare’s Healthcare Systems division, of the departing business. “In addition, we believe Merit Medical will bring a huge amount of expertise in these segments to take Thomas Medical to the next level.”

The transaction has been approved by Merit’s board of directors, and is subject to closing conditions. Merit hopes to close the deal before Dec. 31.

Merit also recently purchased Oswego, Ill.-based manufacturer of peritoneal dialysis catheters, Medigroup Inc.