Merit Medical Executed An Asset Purchase Agreement With EndoGastric Solutions For A Total Cash Consideration Of ~$105M; Updates FY24 Financial Guidance EPS From $3.28-$3.35 To 3.22-$3.31 Vs $3.33 Est.; Revenue From $1.31B-$1.325B To $1.32B-$1.34B Vs $1.32B Est.
- Asset acquisition expands Merit's endoscopy portfolio with a minimally invasive solution for patients suffering from chronic gastroesophageal reflux disease (GERD).
- Asset acquisition projected to add approximately $30 million of revenue, on an annualized basis, in key gastrointestinal endoscopy market that leverages existing commercial footprint.
- Merit reaffirms full-year 2024 financial guidance on standalone basis and updates full-year 2024 financial guidance to include projected partial-year impact from this acquisition.
SOUTH JORDAN, Utah, July 01, 2024 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (NASDAQ:MMSI), a global leader of healthcare technology, today announced it has executed an asset purchase agreement with EndoGastric Solutions, Inc. for a total cash consideration of approximately $105 million. EndoGastric Solutions' EsophyX® Z+ device delivers a durable, minimally invasive non-pharmacological treatment option for patients suffering from GERD.
GERD is a digestive disorder that occurs when the lower esophageal sphincter doesn't tighten correctly, allowing acid from the stomach to enter the esophagus. When this occurs chronically, it can result in serious health conditions, such as esophageal damage and cancer. The EsophyX Z+ device treats GERD by restoring the body's reflux barrier.
Financial Summary:
The assets acquired from EndoGastric Solutions generated approximately $26 million of revenue over the twelve-month period ended December 31, 2023. The acquired assets are expected to contribute revenue, from closing date through December 31, 2024, in the range of $13 to $15 million and are expected to dilute Merit's previously forecasted non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per share, inclusive of approximately $2.7 million of lower interest income on cash balances used for the total purchase consideration and excluding approximately $6.5 million of non-cash and non-recurring transaction-related expenses, and to be dilutive to Merit's full-year 2024 GAAP net income and GAAP earnings per share. The acquisition is expected to be accretive to non-GAAP gross margin, non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per share in the first full-year post close, but dilutive to Merit's GAAP net income and earnings per share for that period.
Updated Fiscal Year 2024 Financial Guidance
Merit's updated full-year 2024 financial guidance now reflects the forecasted impacts of the acquisition of EndoGastric Solutions from the closing date through December 31, 2024. Merit is reaffirming prior full-year 2024 financial guidance ranges for the stand-alone Merit business previously announced on April 30, 2024.
Based upon the information currently available to Merit's management, for the year ending December 31, 2024, after giving effect to the projected contribution of the assets acquired from EndoGastric Solutions, but absent material acquisitions, non-recurring transactions or other factors beyond Merit's current expectations, Merit now expects the following financial results:
Revenue and Earnings Guidance*
| Updated Guidance(1) | Prior Guidance(2) | |||||
| Year Ending | % Change | Year Ending | % Change | |||
| Financial Measure | December 31, 2024 | Y/Y | December 31, 2024 | Y/Y | ||
| Net Sales | $1.324 - $1.340 billion | 5% - 7% | $1.312 - $1.325 billion | 4% - 5% | ||
| Cardiovascular Segment | $1.272 - $1.285 billion | 4% - 5% | $1.272 - $1.285 billion | 4% - 5% | ||
| Endoscopy Segment | $53.3 - $55.7 million | 45% - 51% | $39.7 - $40.1 million | 8% - 9% | ||
| Non-GAAP | ||||||
| Earnings Per Share | $3.22 - $3.31 | 7% - 10% | $3.28 - $3.35 | 9% - 11% | ||
| *Percentage figures approximated; dollar figures may not foot due to rounding | ||||||
2024 Net Sales Guidance - % Change from Prior Year (Constant Currency) Reconciliation*
| Updated Guidance(1) | Prior Guidance(2) | ||||||
| Low | High | Low | High | ||||
| 2024 Net Sales Guidance - % Change from Prior Year (GAAP) | 5.3% | 6.6% | 4.3% | 5.4% | |||
| Estimated impact of foreign currency exchange rate fluctuations | 0.5% | 0.5% | 0.5% | 0.5% | |||
| 2024 Net Sales Guidance - % Change from Prior Year (Constant Currency) | 5.8% | 7.1% | 4.8% | 5.9% | |||
| *Percentage figures approximated and may not foot due to rounding | |||||||
(1) "Updated Guidance" reflects Merit's full-year 2024 financial guidance on standalone basis, plus the forecasted impacts of the acquisition of EndoGastric Solutions, Inc. from closing date through December 31, 2024.
(2) "Prior Guidance" previously introduced on April 30, 2024, and reflects Merit's full-year 2024 financial guidance on a standalone basis, excluding the acquisition of the assets of EndoGastric Solutions.