Global medical device company CareFusion Corp. today announced an agreement to acquire Medegen, an innovator in clinically differentiated needleless access valves and administration sets that deliver intravenous (IV) medication to patients, for $225 million in cash.
"Medegen is an ideal strategic fit with CareFusion due to the complementary nature of our infusion product lines, R&D investments, and our focus on products that are backed by clinical evidence and differentiation," said David Schlotterbeck, chairman and CEO of CareFusion. "With a global opportunity of more than $2 billion for disposable IV sets, Medegen will expand our clinically differentiated product line and add a new dimension to our existing infection prevention portfolio. We will continue to invest in these products to help hospitals reduce catheter-related bloodstream infections and catheter occlusions."
Catheter-related bloodstream infections (CRBSI) have been shown to increase a patient's hospital stay by 10 to 24 days, with approximately 25 percent of the 250,000 annual incidents resulting in death. Medegen products have been shown to contribute to reductions of up to 70 percent in these deadly infections. The U.S. Centers for Medicare and Medicaid Services have identified CRBSI as a "never event" and no longer provide reimbursement for care related to these cases, which cost an average of $29,000 per patient to treat.
"We look forward to being part of the thriving and innovative company we know CareFusion to be," said Charles M. Stroupe, chairman and CEO of Medegen. "As Medegen, we have created a rich, innovative technology portfolio and pipeline, backed by clinical studies that demonstrate the value we can bring hospitals in their ongoing efforts to eliminate catheter-related bloodstream infections and catheter occlusions. As part of CareFusion, we have the opportunity to grow faster by making our technology available to an expanded customer base, with patients around the world benefiting."
CareFusion is an industry leader in IV infusion devices with its Alaris® system and Guardrails® safety software. Medegen markets clinically proven, needle-free IV disposable products under the MaxPlus™ and MaxGuard™ brands with patented technology designed to help healthcare providers reduce CRBSI and prevent catheter occlusions. Together, the companies have complementary product lines, research and development expertise and proprietary technologies to help hospitals improve the safe delivery of IV medications to patients.
There are additional opportunities for revenue synergies through CareFusion's well-established customer relationships worldwide. The acquisition is expected to be neutral to adjusted earnings in the first year and increasingly accretive thereafter. Subject to Hart-Scott-Rodino approval and other customary conditions, the acquisition is expected to close by the CareFusion fiscal 2010 year-end on June 30.
"We look forward to completing the acquisition and welcoming Medegen employees to CareFusion," Schlotterbeck added. "In addition to the complementary nature of our infusion product lines, we have similar company cultures that are committed to innovation and dedicated to the health care providers we serve."
CareFusion became a public company on Sept. 1, 2009 from the spinoff of Cardinal Health's Clinical and Medical Products business. Since its formation, CareFusion has indicated plans to acquire companies or technologies complementary to its industry leading infusion, respiratory, dispensing and surgical products businesses. Medegen would be its first acquisition.
Medegen is a leading innovator in infusion therapy, focused on helping hospitals drive greater clinical performance for improved patient care. The growing company provides clinically superior medical products and reliable, cost-effective manufacturing services to the medical community through its three operating units: Manufacturing Services, Maximus and KippMed.
