Cyberonics, Sorin Agree To $2.7B Merger And Relocation To U.K.
Houston-based Cyberonics announced plans for a $2.7 billion merger with Italian device maker Sorin S.p.A. that will relocate the base of operations for both companies to the U.K. The merger will combine Cyberonics’ neuromodulation expertise with Sorin’s portfolio of cardiovascular devices.
Under the terms of the deal, Cyberonics shareholders will retain a 54 percent share of the yet to be renamed company while Sorin shareholders will hold about 46 percent. Andre-Michel Ballester, current CEO of Sorin, will serve as the CEO of the merged company, temporarily named “NewCo”. Dan Moore, CEO of Cyberonics, will serve as a non-executive chairman, according to a Cyberonics press release.
Bloomberg reports that NewCo will set up its base of operations in the U.K. to take advantage of a lower corporate tax rate.
Sorin’s Ballester said that the merger would allow both companies to share technical expertise and accelerate innovation in their respective specialties.
Cyberonics’ Moore spoke specifically about vagus nerve stimulation (VNS), a Cyberonics-developed technology for the management of epilepsy unresponsive to medication, and the potential for its further innovation offered by Sorin’s expertise.
“Sorin is an ideal partner, given its heart failure program and the ability to combine Vagus Nerve Stimulation with cardiac rhythm management technology,” Moore said in the press release.
The merged company is expected to gain an even larger share of the global medical device market for cardiac rhythm management and neuromodulation products, especially in Europe and Japan.
“Sorin’s well-estbalished international operations are expected to accelerate our epilepsy growth strategy by enabling us to reach a larger number of potential new patients in the underpenetrated markets outside the U.S.,” Moore added.
Both companies expect the merger transaction to move forward unless withdrawal rights are exercised by Sorin’s Italian shareholders.
The news of the merger followed Cyberonic’s announcement of CE Mark approval for its VITARIA system for delivering autonomic regulation therapy for heart failure patients who are unresponsive to drug therapies.
“The results of the ANTHEM-HF study, published in the November 2014 Journal of Cardiac Failure, support the safety and efficacy of ART delivered by the VITARIA system. Heart failure symptoms, as well as ventricular function, were significantly improved,” said Inder Anand, a cardiovascular specialist, in the press release.
Jeffrey Ardell, director of Neurocardiology Research Center of Excellence at UCLA, commented in the release that “ART heralds the dawn of a new chapter in neuro cardiology — an era in which device-based autonomic therapies will reshape the field of cardiology.”