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AtriCure: Nounces Preliminary Results For Third Quarter

The following excerpt is from the company's SEC filing.

, Updates

Outlook for 2015


Acquisition expands available market opportunity

Complementary product lines to provide additional solutions for serious forms of Atrial Fibrillation


October 4

, 2015

AtriCure, Inc.

Nasdaq: ATRC

a leading innovator in treatments for atrial fibrillation (Afib) and left atrial appendage man


today announced that

it has

entered into a definitive merger agreement under which AtriCure has agreed to acquire


, Inc., a privately held developer of innovative



The transaction consideration consists of an upfront payment of approximately 3.7 million shares of AtriCure common stock, valued at $24.60 per share, and approximately $8 million in cash, subject to closing adjustments. The transaction also includes up to $50 million in additional contingent consideration based on completion of enrollment of the CONVERGE IDE trial and PMA approval. Additionally, nContact shareholders are entitled to additional sales-based contingent consideration on revenue in excess of an annual growth rate of greater than 25% through 2019. All contingent consideration can be paid in either cash or AtriCure common stock, or a combination of both.

“nContact is an excellent strategic addition to AtriCure, as it expands and strengthens our presence in the Afib market. We expect the combined entity to provide improved market access and additional collaboration opportunities with cardiac surgeons and electrophysiologists,” said Mike Carrel, President and Chief Executive Officer of AtriCure. “This acquisition reinforces our commitment to the Afib market, product innovation and clinical science. We are excited to be able to offer this therapy to our combined customer base, further the CONVERGE IDE trial, and continue our mission to grow the market with new solutions.”

The transaction will combine two companies committed to solving the challenges associated with the most serious forms of Afib and is expected to:




the addition of

a proven technology

that treats an under-served population of patients

as well as expand AtriCure’s customer account base

Complement and expand

AtriCure’s current product portfolio

and minimally invasive (MIS) intellectual property portfolio

Enhance AtriCure’s commitment to clinical science with the C

DE clinical trial


and sustain

revenue growth


continued margin expansion

and operating leverage opportunities

nContact, based in


, North Carolina, develops and markets a portfolio of innovative devices that provide for less invasive ablation options for the treatment of cardiac arrhythmias. The company’s technology is used in the Convergent procedure, a multi-disciplinary therapy in which a closed-chest surgical epicardial ablation is performed, and then complemented by an endocardial catheter ablation performed by an electrophysiologist. nContact is currently conducting the CONVERGE IDE clinical trial, the first head-to-head study to evaluate the Convergent procedure versus catheter ablation in patients with persistent Afib. In addition to the ongoing IDE trial, individual center results have been published in numerous peer reviewed papers.

Subject to customary closing conditions, the transaction is expected to close

in the next several weeks

triCure shareholder approval is not required.

Financial Impact

AtriCure expects that the transaction will be accretive to its revenue growth rate going forward. As a result of the transaction, AtriCure expects to increase sales and marketing expenditures as well as clinical trial expenditures in order to accelerate efforts in those areas. The company expects the transaction to be dilutive to EBITDA through 2017 and accretive in 2018 and beyond. nContact had 2014 revenues of $8.2 million and is growing approximately 25% this year.