CONMED Corporation (NASDAQ: CNMD) today announced a definitive agreement to acquire privately-held SurgiQuest, Inc. (SurgiQuest) for $265 million on a cash-free, debt-free basis. The transaction will be financed through a combination of cash and borrowings under a new credit facility. The transaction is subject to customary closing conditions, including receipt of U.S. regulatory approval, and is expected to close in the first quarter of 2016.
Founded in 2006 and headquartered in Milford, Connecticut, SurgiQuest develops, manufactures, and markets the AirSeal® System (AirSeal), the first integrated access management technology for use in laparoscopic and robotic procedures. AirSeal consists of a valve-free trocar with continuous pressure sensing and an integrated insufflator and smoke evacuator. AirSeal has been used in more than 250,000 procedures worldwide. Published clinical data demonstrates that AirSeal leads to shorter procedure times and reduced post-operative pain.
During the course of River Cities’ investment, SurgiQuest grew revenue by 16 times in a little over four years, generating greater than 100% CAGR. Since 2011, surgeons have successfully used the company’s flagship product, the AirSeal System, in over 340,000 procedures in more than 700 institutions worldwide. Adoption has risen rapidly with a 150% growth in global procedures over last year, driven by the company’s expansion from robotics into the general laparoscopic market as well as geographic expansion to over 45 countries.
“River Cities is a knowledgeable, industry-focused team. Firm but fair. Very resourceful and always willing to help,” says Kurt Azarbarzin, SurgiQuest Founder. “Carter McNabb (RCCF Managing Director) is a smart and engaged team player that always had our company’s best interest in mind. He was always willing to participate as not only a Board member but as an individual contributor when ever necessary. A true partner.”
“Revitalizing the Advanced Surgical business is a key element of our general surgery strategy, and this transformative acquisition uniquely bolsters the progress we have made. The AirSeal® System is a highly differentiated technology which is fast becoming the standard of care in laparoscopic and robotic surgery where it delivers benefits for the patient, the surgeon, and the hospital. We are very excited to add it to our growing Advanced Surgical portfolio,” commented Curt R. Hartman, President and Chief Executive Officer of CONMED. “We congratulate and welcome SurgiQuest’s talented management and its scientific and sales teams to CONMED. We look forward to joining forces once the transaction closes and providing industry leading technologies to our global customer base.”
Kurt Azarbarzin, SurgiQuest’s Founder and Chief Executive Officer, added, “We are excited to become part of CONMED. We believe that the combination of our organizations’ salesforces, the addition of our research and development expertise, as well as our keen focus on innovation, will enable us to expand our collective market share and to provide distinctively better solutions that improve both the doctor and patient experience.”
Mr. Azarbarzin will join CONMED as Chief Technology Officer of the Advanced Surgical business. He will report to Bill Peters, Vice President and General Manager of Advanced Surgical.