HeartWare International Inc. (NASDAQ: HTWR) announced today that it has entered into a definitive agreement to acquire Valtech Cardio Inc. in a share deal, with no cash involved. Valtech is a privately held company that specializes in the development of innovative, non-invasive surgical and transcatheter valve repair and replacement devices for the treatment of the most prevalent heart valve diseases mitral valve regurgitation (MR) and tricuspid valve regurgitation (TR).
The Israeli company was founded in 1996 and has 40 employees, according to IVC. The company was founded by CEO Yossi Gross and Yiftach Beinart. Based in Or Yehuda near Tel Aviv, the company has raised $26 million to date, and its last financing round was the $18 million it raised in 2010.
Valtech was founded in the Incentive technological incubator in Ariel, which is managed by Peregrine, where it received a grant from the Office of the Chief scientist. Peregrine subsequently invested in Valtech and other investors included OXO Capital Valve Ventures LLC, NGN Biomed Opportunity II LP, as well as other investors, whose names it did not disclose.
According to the terms of the agreement, Valtech shareholders will receive an up-front consideration of 4.4 million shares of HeartWare common stock; 800,000 shares of HeartWare common stock, contingent upon CE Mark approval for Cardioband; and 700,000 shares of HeartWare common stock upon the earlier of first-in-man implants for either Cardioband tricuspid or CardioValve. The transaction also includes warrants to purchase 850,000 shares of HeartWare common stock at an exercise price of $83.73 per share (based on a volume weighted average price of HeartWare shares) exercisable upon attainment of $75 million in net sales (trailing 12 months) of Valtech products, and an earn-out payment of $375 million (payable in cash or stock, at the discretion of HeartWare), upon attainment of $450 million of net sales (trailing 12 months) of Valtech products.