Italian Cardiovascular device specialist Sorin S.p.A., and neuromodulation company Cyberonics Inc. are to merge, creating a new entity that they expect will be a major player in its combined fields.
The proposed transaction has been unanimously approved by the boards of directors of both companies. The new company, which will be named prior to closing, will have a combined equity value of approximately $2.7 billion (€2.4 billion) based on the closing price of Sorin and Cyberonics shares on 25 February.
The press release announcing the merger describes is as the bringing together of global leaders in cardiac surgery and neuromodulation. It’s clear that the combination will have ambitions beyond those realisable by the entities in isolation. It aims to be a major player in cardiac rhythm management, especially in Europe and Japan, with “several promising opportunities focused on multi-billion dollar markets.” These include complementary research programs addressing heart failure, with an initial commercial launch in Europe anticipated in the coming weeks. Both companies bring minority equity investments that are complementary in different forms of sleep apnea. Sorin, in addition, has opportunities that address mitral valve regurgitation.
The new company’s CEO will be Sorin’s current incumbent, André-Michel Ballester, who said of the merger; “I am delighted to announce this transformational merger between Sorin and Cyberonics, which we expect to create significant value for shareholders. As one company we will be able to leverage our combined strengths, capture new opportunities and create new solutions to benefit patients and healthcare professionals alike. This is particularly exciting for our employees, who will be able to share technical expertise and innovate faster, ensuring that we serve our customers by remaining at the forefront of new product development which continues to be the foundation of our success.”
Cyberonics CEO and soon-to-be non exec Chair of the new company, Dan Moore said; “This transformational transaction maximizes both companies’ strengths and leadership positions for the benefit of patients and our shareholders. Sorin is an ideal partner, given its heart failure programs and the ability to combine Vagus Nerve Stimulation with cardiac rhythm management technology. Sorin’s well-established international operations are expected to accelerate our epilepsy growth strategy by enabling us to reach a larger number of potential new patients in the underpenetrated markets outside the U.S. while integrating Sorin’s technology expertise into future neuromodulation products. While each company has a strong track record of execution on its own, the geographic diversification, benefits of scale and strong financial profile of the combined company will create tremendous new opportunities to drive growth and build significant shareholder value.”
Source: Business Wire