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CryoLife Closes Acquisition of Jotec to Expand Product Portfolio in Stent Graft Market
Wednesday 06 December 2017

6 December 2017 - Georgia, US-based medical device and implatable tissues provider CryoLife, Inc. (NYSE: CRY), a distributor of cryogenically preserved human tissues for cardiac and vascular transplant applications medical device developer, has closed the acquisition of Germany based surgical grafts developer Jotec AG, to strengthen geographic footprint and expand offerings in the stent graft market, the company said.

This deal was announced in October.

Under terms of the definitive agreement, CryoLife acquired Jotec for an upfront payment of USD 225m, consisting of 75% in cash and 25% in CryoLife common stock issued to Jotec's shareholders.

CryoLife expects to finance the transaction and related expenses, as well as refinance its existing USD 69m term loan, with new USD 255m senior secured credit facilities, consisting of a USD 225m institutional term loan B and a USD 30m undrawn revolving credit facility, USD 56.25m in CryoLife common stock, and available cash on hand.

The senior secured credit facilities are fully underwritten by Deutsche Bank, Capital One and Fifth Third Bank. The transaction is expected to close later this year, subject to customary closing conditions.

The combination of CryoLife and Jotec will create a company with a product portfolio focussed on aortic surgery, and will position CryoLife to compete in the endovascular surgical markets.

CryoLife said it believes this acquisition will enable CryoLife to deliver sustained, high single-digit revenue growth, while also diversifying revenues into a larger addressable market.

Jotec has a technologically differentiated product portfolio addressing the USD 2bn global market for stent grafts used in endovascular and open repair of aortic diseases.

The acquisition will leverage CryoLife's global infrastructure and accelerate its ability to go direct in Europe, and will foster cross-selling opportunities between the CryoLife and Jotec product portfolios. The transaction will also drive gross margin expansion and accelerate our trajectory towards 20% or higher operating margins.

Jotec generated revenue of approximately EUR 41m (USD 49m) in 2016, representing compound annual growth of approximately 17% over the preceding five years. JOTEC generated revenues of EUR 43m (USD 51m) for the 12 months ended June 30, 2017.

CryoLife is in the manufacturing, processing, and distribution of medical devices and implantable living tissues used in cardiac and vascular surgical procedures. CryoLife markets and sells products in more than 80 countries worldwide.

Jotec develops technologically differentiated endovascular stent grafts and cardiac and vascular surgical grafts, for aortic and peripheral vascular disease.

In connection with the transaction, Vinson and Elkins is acting as lead legal counsel to CryoLife. Walder Wyss Ltd is acting as lead legal counsel to Jotec.
Details
Date Published: 06/12/2017
Target: Jotec AG
Country: Germany
Deal Size: 225m (USD)
Sector: Healthcare
Type: Corporate acquisition
Financing: Cash and Stock
Status: Closed
Vendor:
Buyer: CryoLife, Inc
Buyer Advisor: Vinson and,  Elkins 
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