St. Jude Medical Acquires Interventional Cardiology Company

Continuing a buying spree that began last summer, St. Jude Medical Inc. (St. Paul, MN) has announced a definitive agreement to acquire Velocimed LLC (Maple Grove, MN), a manufacturer of interventional cardiology devices. Under the terms of the deal, St. Jude will pay $82.5 million in cash, less $8.5 million at the expected closing of the purchase in the second quarter of this year. Additional payments are tied to future revenue targets and FDA approval of Velocimed's Premere patent foramen ovale closure system.

In July 2004, St. Jude said it would be splitting its Daig division into two business segments: a cardiology division and an atrial fibrillation division. In the past nine months, the company has spent more than $500 million on young companies, including Epicor Medical Inc., Irvine Biomedical Inc., Endocardial Solutions, and now, Velocimed.

In a statement, St. Jude chairman, president, and CEO Daniel J. Starks explained that the company's most recent acquisition, which will be integrated into its cardiology division, “supports our objective of building on the market leadership of our Angio-Seal vascular closure product line.” The Angio-Seal, which surpassed the five-millionth-shipment milestone in January, remains a backbone of the company's business.

“The timing of the acquisition is very good because we were at a point where we have approval to market our three devices outside the U.S. and one of our products in the U.S.,” says Jeff Killion, vice president of marketing at Velocimed. “We needed to either begin to hire a sales force or join into a company that already has one ready to go.” According to Killion, St. Jude was a natural choice. Not only were the company's deep pockets attractive, but the interventional cardiologists that have expressed interest in Velocimed's embolic protection device, catheters, and patent foramen ovale closure system overlap with the target audience for the Angio-Seal.