St Jude Medical acquires Radi Medical Systems

31 December 2008

St Jude Medical, Inc (NYSE: STJ) has completed the acquisition of  Radi Medical Systems AB for $250 million in cash.

Radi Medical Systems is a world leader in two segments of the market for cardiovascular medical devices in which St. Jude Medical does not currently participate. For 2008, Radi Medical Systems is expected to generate approximately $80 million in sales, a 19% increase over 2007.

Radi Medical Systems’ pressure measurement guidewire, PressureWire Certus, comprises approximately a 70% share of the global market for physiological assessment of coronary lesions. The product is supported by a large and growing body of clinical evidence, including the FAME (fractional flow reserve vs. angiography for multivessel evaluation) study. The results of the FAME study were presented at the Transcatheter Cardiovascular Therapeutics conference in October 2008, and can be viewed at The market for physiological assessment of coronary lesions totaled over $60 million in 2008 and is projected to continue growing at a strong double-digit rate.

Radi Medical Systems’ FemoStop and RadiStop product lines comprise approximately a 60 percent share of the global market for manual compression-assist products for vascular closure. This market totaled approximately $45 million in 2008 and is projected to continue to grow at least at a mid single-digit rate.

The FemoStop and RadiStop product lines, together with St. Jude Medical’s Angio-Seal line of active vascular closure products, will be part of an expanded program by St. Jude Medical to fully develop the potential of a global vascular closure device market that is only about 27% penetrated.

“This acquisition will accelerate the expansion of St. Jude Medical’s cardiovascular growth platform and benefit the customers, employees and shareholders of both companies,” said Daniel J. Starks, chairman, president and chief executive officer of St. Jude Medical. “We look forward to capturing strategic synergies through this acquisition and further expanding our investment in our cardiovascular division technology, products and programs.”

Thomas Engstrom, chief executive officer of Radi Medical Systems, said, “We are pleased to join with the industry leader in active vascular closure and a partner who shares our vision of developing innovative cardiovascular technologies that improve patient care. This transaction brings together complementary product lines and, through St. Jude Medical’s sales and distribution infrastructure, extends our reach to even more physician customers for the benefit of the patients they help everyday.”

With this transaction, Radi Medical Systems will become part of the St Jude Medical Cardiovascular Division. St Jude Medical says that the transaction is expected to be neutral to  consolidated earnings per share in 2009 and is expected to be positive to consolidated earnings per share beginning in 2010. St Jude Medical funded the acquisition with cash on hand outside the United States as well as with the proceeds from a new three-year term loan established recently with a syndicate of banks.

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