NEWS BRIEF: Utah-based Merit Medical Systems Just Spent 4X Revenue, $105 Million, to Acquire Certain Assets of EndoGastric Solutions in an All-Cash Transaction

South Jordan, Utah-based Merit Medical Systems (NASDAQ:MMSI) has acquired certain medical device assets of Redmond, Washington-based EndoGastric Solutions for $105 million in an all-cash transaction, at 4X 2023 revenue.

According to the news release announcing the asset purchase agreement, Merit has acquired the EsophyX Z+ device from EndoGastric, a platform that delivers "... a durable, minimally invasive non-pharmacological treatment option for patients suffering from GERD."

[NOTE: According to the EndoGastric website:

["Gastroesophageal reflux disease (GERD) is a common gastrointestinal disease that affects nearly 20 percent of the U.S. population. It is a chronic condition in which the gastroesophageal valve (GEV) allows gastric contents to reflux (wash backwards) into the esophagus, causing heartburn and possible injury to the esophageal lining."]

Given the fact that the EsophyX Z+ device generated ~$26 million of revenue for during the twelve-month period ended 31 December 2023, Merit is paying EndoGastric just over 4X against the EsophyX Z+ 2023 topline sales to acquire the GERD-focused technologies.

According to Fred Lampropoulos, Merit’s Chairman, Chief Executive Officer and Founder, the acquisition "... enhances our product portfolio in existing clinical specialties while expanding our global footprint in the multi-billion-dollar gastrointestinal market. We look forward to helping more patients by providing clinicians with a sustained and minimally invasive treatment option for chronic GERD.”  

Additionally, the company " ... expects the EsophyX Z+ acquisition (will) be accretive to (Merit's) non-GAAP gross and operating margins, non-GAAP net income, and non-GAAP (earnings per share) in the first full year post-closing."

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