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HeartWare buys Israeli company Valtech Cardio for $860m

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Friday, September 4th, 2015

peregrineventures

As reported in Globes: The acquisition of the Or Yehuda valve repair device company includes shares and milestone payments.

The Israeli company was founded in 2006 and has 50 employees, according to IVC. The company was founded by CEO Amir Gross, Yossi Gross, and Peregrine Ventures headed by Eyal Lifshitz and Boaz Lifshitz. Based in Or Yehuda near Tel Aviv, the company has raised $70 million to date.

Peregrine Ventures will be in Sydney at the end of November this year. If you would like to meet with them, please contact us. 

HeartWare International Inc. announced today that it has entered into a definitive agreement to acquire Valtech Cardio Inc. in a share and milestone payments deal that could reach $860 million. 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).

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.

Amir Gross said, “Valtech has benefited significantly from HeartWare’s early investment in our company. Since then, we have developed a strong relationship based on a shared mission to deliver transformative products to patients with advanced heart failure and degenerative heart conditions. By joining HeartWare, we can more quickly and fully realize the potential of our pipeline technologies and further influence the underpenetrated markets that we serve. HeartWare’s existing market development experience and commercial infrastructure provide a compelling platform from which to launch multiple products worldwide, including a near-term launch of Cardioband in international markets following anticipated CE Mark approval this year. Together, we can offer clinical heart failure teams a compelling portfolio of surgical and interventional technologies to serve the advanced heart failure population.”

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.