PLYMOUTH, Minn., June 24, 2009 (GLOBE NEWSWIRE) -- ev3 Inc. (Nasdaq:EVVV), a global endovascular device company, today announced that it has closed the acquisition of Chestnut Medical Technologies, Inc., a privately held, California-based company focused on developing minimally invasive therapies for interventional neuroradiology. The transaction broadens 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.
ev3 acquired 100 percent of the equity interests of Chestnut for $26.0 million in net cash and approximately 5.073 million shares of ev3 common stock (65% of total consideration) for total upfront consideration of approximately $75 million. An additional milestone-based contingent payment of up to $75 million is payable in a combination of cash and ev3 common stock upon the receipt of U.S. Food and Drug Administration pre-market approval of the Pipeline device. ev3 financed the upfront cash payment at closing through cash on hand. Any contingent milestone payment is not expected to be paid until 2011.
ev3 previously announced that it had signed a definitive agreement to acquire Chestnut on June 2, 2009. Chestnut's Pipeline technology is a new class of cerebral embolization device that is designed to divert blood flow away from an aneurysm in order to provide a complete and durable aneurysm embolization while maintaining patency of the parent vessel. ev3 estimates that approximately one fourth of worldwide aneurysm treatment procedures could be eligible for treatment with flow diversion devices over the next five years, translating into a market potential of approximately $350 million in 2013.
As previously announced, ev3 anticipates that the transaction will be dilutive to ev3's GAAP earnings per share (EPS) and non-GAAP adjusted earnings per share in 2009 and on a GAAP EPS basis in 2010. ev3 anticipates the transaction will be accretive to ev3's non-GAAP adjusted EPS in 2010 and beyond. The transaction is expected to be neutral to ev3's EPS on a GAAP basis in 2011 and accretive thereafter. ev3 will provide additional information on the financial impact of the transaction, including its effect on ev3's 2009 guidance, during ev3's second quarter 2009 earnings call.
About ev3 Inc.
Since its founding in 2000, ev3 has been dedicated to developing innovative, breakthrough and clinically proven technologies and solutions for the treatment of peripheral vascular and neurovascular diseases. ev3's products are used by endovascular specialists to treat a wide range of peripheral vascular and neurovascular diseases and disorders.
