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AtriCure to Acquire Heart Device Developer SentreHEART
Tuesday 13 August 2019

13 August 2019 - US-based atrial fibrillation and left atrial appendage management treatments developer AtriCure, Inc. (NASDAQ: ATRC) has entered into a definitive agreement to acquire SentreHEART, Inc., a privately held developer of percutaneous left atrial appendage management solutions, the company said.

The company also announced updated full year 2019 guidance.

Under the terms of the agreement to acquire SentreHEART, the transaction consideration consists of an upfront payment of approximately USD 40m in cash and AtriCure common stock, plus additional contingent consideration based on the achievement of certain clinical and reimbursement milestones over the next several years, all of which are value-creating events.

Of the contingent consideration, USD 140m is based on milestones related to the aMAZE IDE clinical trial, including PMA approval, and USD 120m is based on a milestone related to reimbursement for the therapy involving SentreHEART devices.

All contingent consideration would be payable in a combination of cash and stock.

SentreHEART was founded in 2005 and is based in Redwood City, California.

The company's technology is currently being studied in the aMAZE Trial, an FDA-approved, prospective, multicenter, randomized controlled trial evaluating the LARIAT Suture Delivery Device for LAA closure adjunctive to Pulmonary Vein Isolation catheter ablation for the treatment of persistent and longstanding persistent Afib.

The objective of the aMAZE Trial is to demonstrate that the LARIAT device for LAA closure, plus a PVI ablation, will lead to a reduced incidence of recurrent Afib compared to PVI alone, with a high safety profile. The aMAZE Trial is expected to enroll up to 600 total patients at 65 sites with one-year follow up.

Primary endpoint measures are freedom from episodes of Afib greater than 30 seconds at one-year post treatment.

AtriCure projects total revenue for 2019 to be in the range of USD 224.5m to USD 228.5m, which includes minimal contribution from SentreHEART, and reflects approximately 11% to 13% organic growth.

Revenue contribution from the SentreHEART business is expected to be nominal until after completion of the aMAZE Trial and PMA approval.

For 2019, AtriCure now expects adjusted EBITDA, a non-GAAP measure, to be a loss due to integration and operating costs resulting from the transaction. Full-year adjusted EBITDA loss is expected to be in the range of USD 7m to USD 9m, excluding acquisition costs.

This adjusted EBITDA loss translates into an adjusted loss per share between USD 1.07 and USD 1.14.

For 2020, the company expects to have an adjusted EBITDA loss of less than USD10 m, as investments shift from completing the aMAZE Trial to preparing for FDA approval.

Adjusted EBITDA and adjusted loss per share are non-GAAP measures.

AtriCure, Inc. provides technologies for the treatment of Afib and related conditions.

SentreHEART is a privately-owned medical device company based in Redwood City, California. Founded in 2005, SentreHEART has developed innovative technology for remote delivery of suture for closure of anatomic structures including the LAA.

The company is committed to clinical evidence development and is currently sponsoring the FDA-approved prospective, multi-center, randomized controlled trial known as the aMAZE Trial.

Piper Jaffray and Co. is acting as exclusive financial advisor and Pepper Hamilton LLP is serving as legal counsel to AtriCure for this transaction. Guggenheim Securities LLC is acting as exclusive financial advisor and Goodwin Procter LLP is serving as legal counsel to SentreHEART for this transaction.
Details
Date Published: 13/08/2019
Target: SentreHEART, Inc
Country: USA
Deal Size: 40m (USD)
Sector: Healthcare
Type: Corporate acquisition
Financing: Cash and Stock
Status: Agreed
Vendor:
Buyer: AtriCure, Inc
Buyer Advisor: Piper Jaffray and Co , Pepper Hamilton LLP
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