Vascular Solutions Inc. (VASC), a clinical solutions maker for coronary and peripheral vascular procedures, Wednesday said that it has acquired the assets related to the EXPRO Elite and MICRO Elite snare products from Radius Medical Technologies Inc, for an aggregate price of $6.5 million. Vascular expects the acquisition to be accretive to earnings by approximately $0.02 per share in 2011, with only modest transition and integration costs in the fourth quarter of 2010.
Radius and Vascular Solutions has a distribution relationship under which Vascular has been selling the EXPRO Elite and MICRO Elite snares in the U.S., while Radius has been selling the product in international markets through a network of independent distributors. Sales of the products were $1.6 million during the last four quarters, consisting of $1.3 million in sales in the U.S. and $0.3 million in sales to distributors in international markets.
Effective immediately, international sales of the snare products will transition to Vascular Solutions' existing international distribution network. Vascular Solutions expects to transfer the manufacturing of the products from Radius' facility in Boston to Vascular Solutions' existing facility in Minnesota over the next six months.
The assets acquired also includes the QUATTRO Elite and SYMPRO Elite snares and the Oracle retrieval system, all of which are either recently launched or in development.
Howard Root, Chief Executive Officer of Vascular Solutions. "Upon completion of the manufacturing transfer we expect to be able to both improve our gross margin and adopt more competitive pricing to gain market share in the existing $35 million snare market. We also look forward to launching the QUATTRO Elite and SYMPRO Elite snares either late this year or early in 2011 and to explore the possibilities with the Oracle retrieval system."
The acquisition price consists of $5 million paid in cash at closing and $1.5 million payable in cash upon successful completion of the transfer of the manufacturing processes. In addition, Radius is also entitled to receive a cash earn-out payment for the next three year in an amount equal to 25% of net sales in excess of a target amount for each year.
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