Haemonetics HAE recently entered into a definitive agreement to acquire privately held Attune Medical — the manufacturer of the ensoETM proactive esophageal cooling device. The acquisition is subject to customary closing conditions and is expected to be completed in the first quarter of fiscal 2025.
The recent development will significantly boost Haemonetics' global Hospital business.
Financial Terms
Under the terms of the agreement, Haemonetics will make an upfront cash payment of $160 million at closing to Attune Medical. It also includes an additional contingent consideration based on sales growth in the three years following the consummation of the transaction and the achievement of certain other milestones.
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Attune Medical generated approximately $22 million in revenues during its recently completed fiscal 2023, which was more than double the revenues from the prior fiscal year. The transaction is expected to be immediately accretive to Haemonetics’ revenue and earnings growth following its completion. The company plans to finance this acquisition through a combination of cash on hand and a draw under its revolving credit facility.
More on Attune Medical and EnsoETM
Chicago-based Attune Medical (formerly Advanced Cooling Therapy, Inc.) pioneered the practice of using the esophageal space to proactively manage patient temperature and reduce the likelihood of esophageal injury during cardiac ablation procedures. Its novel ensoETM technology is designed for use across a range of medical conditions involving patient cooling or warming, including during treatment in critical care, neurocritical care, trauma, burn surgery, spine surgery and cancer surgery, among others.
In the treatment of atrial fibrillation, a condition that affects three to six million people in the United States, ensoETM is the only FDA-cleared device in the market that significantly reduces the likelihood of esophageal injury during radiofrequency cardiac ablations. Designed for ease of use, the single-tube ensoETM is placed in the esophagus and connected to an external heat exchange unit to create a closed-loop system for proactive controlled temperature management.
Attune Medical has shipped more than 68,000 ensoETM devices for hospital use, and it has been utilized in more than 50,000 electrophysiology procedures since first becoming available in 2015.
Strategic Benefits of the Deal
Attune Medical's ensoETM will bolster Haemonetics' presence in the electrophysiology market and complement its leadership in Vascular Closure. EnsoETM effectively reduces esophageal injuries without requiring hospitals to purchase complex and costly new ablation systems.
The company looks forward to empowering more physicians with this groundbreaking solution to improve patient outcomes. Further, it also expands Haemonetics’ EP (electrophysiology) portfolio with another industry-leading technology to accelerate the growth and impact of its Interventional Technologies business.
Industry Prospects
Per a Research report, the global electrophysiology devices market was valued at $6.1 billion in 2022 and is expected to witness a CAGR of 11.2% by 2030.
Other Developments in the Hospital Business
Haemonetics’ Hospital Business delivered robust 22% revenue growth in the recently completed third quarter of fiscal 2024, with double-digit growth across all its products. The company is on track to be in 80% of the target top 600 U.S. hospital accounts by the end of fiscal 2024, which will provide it with access to the vast majority of addressable procedures in the market. The footprint will also serve as a foundation for future growth, particularly as it capitalizes on opportunities through its innovation and M&A pipelines.
In December 2023, Haemonetics completed the acquisition of OpSens Inc. In addition to the expected immediate and longer-term financial benefits for Haemonetics, the acquisition expands the company's Hospital business unit portfolio with innovative fiber optic sensor technology in the attractive interventional cardiology market.
Price Performance
In the past six months, shares of HAE have decreased 13% against the industry’s rise of 9.9%.
Zacks Rank and Key Picks
Haemonetics currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Cardinal Health CAH, Stryker SYK and DaVita DVA. While Stryker carries a Zacks Rank #2 (Buy), Cardinal Health and DaVita each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health’s stock has increased 54.8% in the past year. Earnings estimates for Cardinal Health have risen from $6.91 to $7.28 in fiscal 2024 and from $7.76 to $8.03 in fiscal 2025 in the past 30 days.
CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 15.6%. In the last reported quarter, it posted an earnings surprise of 16.7%.
Estimates for Stryker’s 2024 earnings per share have increased from $11.79 to $11.86 in the past 30 days. Shares of the company have moved 33.1% upward in the past year compared with the industry’s rise of 8.8%.
SYK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.1%. In the last reported quarter, it delivered an average earnings surprise of 5.8%.
Estimates for DaVita’s 2024 earnings per share have moved from $8.46 to $8.97 in the past 30 days. Shares of the company have increased 70.7% in the past year compared with the industry’s 20.3% rise.
DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 35.6%. In the last reported quarter, it delivered an average earnings surprise of 22.2%.
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