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Edwards Lifesciences Corp 8-K Report, Acquisition Completed (Jan 23, 2017)

Filed January 23, 2017For Securities:EW

Summary

Edwards Lifesciences Corporation (EW) announced the completion of its acquisition of Valtech Cardio Ltd. on January 23, 2017. Valtech is a developer of the Cardioband system, a transcatheter repair technology for mitral and tricuspid valves. This strategic acquisition is expected to enhance EW's position in the structural heart market, particularly in valve repair. The total consideration for the acquisition includes an upfront payment of approximately $340 million in cash and EW common stock, with potential additional milestone payments of up to $350 million over 10 years. Additionally, EW has secured an option to purchase Valtech's early-stage transseptal mitral valve replacement technology program, Miraltech, for $200 million plus contingent consideration, providing a future growth avenue.

Key Highlights

  • 1Edwards Lifesciences (EW) has completed the acquisition of Valtech Cardio Ltd., a developer of transcatheter mitral and tricuspid valve repair technology.
  • 2The acquisition is expected to strengthen EW's structural heart portfolio and competitive position.
  • 3The upfront consideration for the acquisition was approximately $340 million, comprised of cash and EW common stock.
  • 4Potential future milestone payments of up to $350 million are tied to regulatory and sales performance over 10 years.
  • 5EW has secured a two-year option to acquire Valtech's early-stage Miraltech mitral valve replacement technology program for $200 million plus contingent consideration.
  • 6The company issued 2,804,948 shares of its common stock as part of the merger consideration, exempt from SEC registration.

Frequently Asked Questions

The acquisition of Valtech Cardio and its Cardioband system is aimed at enhancing Edwards Lifesciences' position in the rapidly growing structural heart market. The Cardioband system's transcatheter repair capabilities for mitral and tricuspid valves are complementary to EW's existing offerings and address a significant unmet need in valve repair.

The total potential financial commitment includes an upfront payment of approximately $340 million in cash and stock. Furthermore, there are potential milestone payments of up to $350 million over a 10-year period, contingent upon achieving specific regulatory and sales targets. The option to acquire the Miraltech program also represents a potential future payment of $200 million plus contingent consideration.

The Miraltech Program represents an early-stage transseptal mitral valve replacement technology. The option secured by Edwards Lifesciences provides them with the opportunity to evaluate and potentially acquire this advanced technology within two years, offering a significant future growth prospect in the mitral valve space.

The number of Edwards Lifesciences common shares issued as part of the merger consideration was determined based on the proportion of the total consideration allocated to stock and the volume-weighted average trading price of EW's common stock on the NYSE for the five consecutive trading days ending two business days before the closing date of the merger.