US heart pump maker Thoratec acquires Australian counterpart HeartWare for $282 million
16 February 2009
Heart device maker Thoratec Corp. has agreed to buy Australian company HeartWare International in a cash-and-stock valued at approximately $282 million.
Thoratec is buying HeartWare for its experimental heart pumps, which can extend life for patients with heart failure, the company said. HeartWare's implantable pump is sold in Europe and the company has begun enrolling patients in tests for US approval. Thoratec's HeartMate II pump is approved in the US for patients awaiting transplants. The company has asked regulators to expand use for patients with heart failure.
''This transaction is a positive development for heart failure patients and the clinicians who treat them by combining Thoratec's portfolio of commercially approved devices with HeartWare's innovative technologies,'' said Gary Burbach, CEO of Thoratec, in the statement.
Pleasanton, California-based Thoratec will pay about 50 per cent of the price in cash and 50 per cent in shares of Thoratec common stock, which closed Thursday at $26.37. Thoratec expects the transaction will be dilutive to earnings into 2011. The company expects to take charges related to the deal of approximately $15 million to $20 million this year.
In addition to the above, Thoratec will provide HeartWare with a convertible loan facility of up to $28 million to fund ongoing operations until the close of the transaction, which is currently expected to occur in the second half of 2009. The Boards of Directors of both companies have approved the transaction. The transaction is subject to HeartWare shareholder approval and other customary closing conditions, including regulatory clearance in the US.
Banc of America Securities LLC was financial adviser and Latham & Watkins LLP was legal counsel to Thoratec. JP Morgan acted as financial adviser and Shearman & Sterling LLP acted as legal counsel to HeartWare.
HeartWare has US headquarters in Farmington, Massachusetts, and Australian headquarters in Sydney, Australia.
Thoratec shares rose 98 cents, or 3.7 per cent, to $26.60 at 4:11 p.m. New York time in NASDAQ Stock Market composite trading. HeartWare's Australian trading was halted.