Merit Medical Systems Inc., a South Jordan maker of disposable medical products, has acquired the assets of Ostial Solutions, a privately held company that developed a system to precisely place stents into arteries serving the heart and kidneys.
Fred Lampropoulos, chairman and CEO of Merit, said the new placement system fits in well with the Utah company’s existing product lines.
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"This tool will help both patients and physicians by improving the accuracy of stent placements," he said Thursday.
Stents are artificial tubes inserted into the body to restore blood flow in arteries that have become clogged because of disease. When stents aren’t placed properly, additional costly procedures often are necessary to correct the problem.
Lampropoulos said Ostial Solutions already had received Food and Drug Administration approval before the deal to market the product.
"As part of our acquisition we acquired their inventory, so we’ve already started shipping product" from Merit’s South Jordan plant, he said.
The product costs about $800 per unit. Lampropoulos believes it could generate as much as $30 million a year in sales within five years.
For the first nine months of its 2011 fiscal year, Merit Medical reported revenue of $268.4 million, compared with $215.6 million in the comparable nine-month period in 2010.
In announcing the sale to Merit, Ostial Solutions President R. Kevin Plemmons said the Kalamazoo, Mich.-based company was funded by a group of angel investors.
"The sale . . . to Merit allows our investors to realize a return on their investments," he said. "They also will have the satisfaction of seeing a company move on to the next level."
Lampropoulos said Merit’s acquisition was not large enough to trigger any reporting requirements to federal regulators.
"It wasn’t one of our $90 million acquisitions, but more in the $10 million to $15 million range," he said.
Under terms of the deal, 33 percent of the acquisition price was paid when the deal closed. Another 22 percent is due in six months. The balance will be paid as Merit achieves its sales objectives for the product.
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