CryoLife Announces Definitive Agreement to Acquire JOTEC
CryoLife, Inc. ("CryoLife"; NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, announced today that it has entered into a definitive agreement to acquire JOTEC AG ("JOTEC"). JOTEC is a German-based, privately-held developer of technologically differentiated endovascular stent grafts, and cardiac and vascular surgical grafts, focused on aortic repair. The combination of CryoLife and JOTEC will create a Company with a broad and highly competitive product portfolio focused on aortic surgery, and will position CryoLife to compete strongly in the important and growing endovascular surgical markets.
Pat Mackin, Chairman, President, and Chief Executive Officer of CryoLife, said, "We believe this acquisition will enable CryoLife to deliver sustained, high single-digit revenue growth, while also diversifying our revenues into a significantly larger addressable market. JOTEC has a technologically differentiated product portfolio addressing the $2 billion global market for stent grafts used in endovascular and open repair of aortic diseases. Their advanced product portfolio has allowed them to achieve a 17 percent revenue CAGR over the past five years, significantly outpacing the growth in the overall European market. We expect the acquired portfolio to continue to post double-digit growth outside of the United States for at least the next five years. In addition, the acquisition will leverage our global infrastructure and accelerate our ability to go direct in Europe, and will foster considerable cross-selling opportunities between the CryoLife and JOTEC product portfolios. The transaction will also drive gross margin expansion and accelerate our trajectory towards 20 percent or higher operating margins. We believe this will position CryoLife to deliver growth in non-GAAP EPS at a CAGR of at least 20 percent over the next five years."
Mr. Mackin added, "We also expect the JOTEC new product pipeline and R&D capabilities to drive longer-term growth beyond the five year horizon, particularly as their most innovative products enter the U.S. market. We plan to utilize CryoLife's clinical and regulatory expertise to gain FDA approval for these products, which we believe will allow for entry into the U.S. market."