LivaNova PLC (NASDAQ:LIVN) (“LivaNova”) and MicroPort Scientific
Corporation (HK:00853) (“MicroPort”) today announced that the
companies have entered into a binding Letter of Intent (“LOI”) for
the sale of LivaNova’s Cardiac Rhythm Management (“CRM”) Business
Franchise to MicroPort for $190 million in cash.
The CRM Business Franchise develops, manufactures and markets
products for the diagnosis, treatment and management of heart
rhythm disorders and heart failures. CRM products include
high-voltage defibrillators, cardiac resynchronization therapy
devices and low-voltage pacemakers. The CRM Business Franchise
generated approximately $249 million in net sales in fiscal year
2016 and has approximately 900 employees with operations chiefly in
Clamart, France; Saluggia, Italy; and Santo Domingo, Dominican
Republic.
MicroPort is a leading medical device company, focused on
innovating, manufacturing and marketing high-quality and high-end
medical devices globally.
In 2014, LivaNova (formerly Sorin Group) and MicroPort founded a
China-based joint venture called MicroPort Sorin CRM (Shanghai)
Co., Ltd. (the “Joint Venture”), to market CRM devices, including
implantable pacemakers, defibrillators and cardiac
resynchronization devices in China. During the past four years, the
Joint Venture has achieved many milestones in the development,
manufacture and promotion of CRM products for the China market. In
September 2017, the Joint Venture announced the China Food and Drug
Administration approval of the Rega pacemaker family, the smallest
sized pacemakers available on the Chinese market.
“The CRM Business Franchise is a global business and strong
regional player with attractive assets, a robust pipeline and
growth potential. Its strong position in Europe complements our
leadership position in China and growing presence in the United
States and Emerging Markets, enabling us to further strengthen each
other’s worldwide reach. Meanwhile, with the commitment and
dedication of its employees, combined with the precision and
innovation of the technology portfolio of the CRM business, I am
confident that MicroPort and the CRM business can grow together –
faster, better and stronger – in the global arena,” said Dr.
Zhaohua Chang, Chairman and Chief Executive Officer of MicroPort.
“This combination represents a great opportunity to build upon our
ongoing commitment and expertise to accelerate the development of
new CRM products. We are committed to dedicating the focus and the
necessary resources to fully leverage and maximize the business’
potential. We look forward to welcoming CRM’s talented employees to
the MicroPort family.”
“This transaction represents a great outcome for LivaNova, our
CRM Business Franchise and MicroPort,” said Damien McDonald,
LivaNova’s Chief Executive Officer. “The sale will enable us to
focus on LivaNova’s areas of strength and market leadership in our
Cardiac Surgery and Neuromodulation businesses. With this
divestiture, we are building the right foundation. We are focusing
our portfolio on businesses that contribute to our growth and drive
shareholder value. In addition to the implementation of other
initiatives, completion of this milestone will allow LivaNova to
improve margins, drive profitability and deliver on our commitments
to shareholders. We will continue to take actions that strengthen
our position as a focused med-tech innovator dedicated to improving
the lives of patients around the world.”
McDonald continued, “We have worked with the team at MicroPort
over the past four years as a joint venture partner in MicroPort
Sorin Cardiac Rhythm Management Co. Ltd. and have a great deal of
respect for their organization and commitment to innovative
science. We believe that in MicroPort, our CRM Business Franchise
has found the ideal home to reach its full potential. We expect
that the acquisition of the business franchise by MicroPort, a
leading global medical device company, will ensure continued growth
and development for the business, opportunities for its employees
and benefits for the physicians and patients who rely on these
lifesaving products.”
LivaNova previously announced on Sept. 14 it was reviewing
strategic options for the CRM Business Franchise, including a
potential divestiture.
Transaction Terms, Closing and Financial Updates
LivaNova and MicroPort expect to enter into the definitive
acquisition agreement contemplated by the LOI following completion
of the notification and consultation process with CRM’s employee
works councils as required by local laws. Completion of the
transaction is subject to entry into the definitive acquisition
agreement, receipt of relevant regulatory approvals, including
fulfilling the requirements of the Hong Kong Stock Exchange’s Major
Transaction requirements, and other customary closing conditions.
The companies expect the transaction to close in the second quarter
of 2018.
LivaNova anticipates it will recognize a material impairment
primarily related to the intangible assets of its CRM Business
Franchise during the fourth quarter of 2017 as a result of the
commitment to undertake the proposed transaction. Beginning in the
fourth quarter of 2017, LivaNova will present its results from
continuing operations on a pro forma basis with the CRM Business
Franchise presented as a discontinued operation. As a result,
the Company expects full-year 2017 net sales from continuing
operations will decrease by approximately 20 percent, adjusted
operating margin from continuing operations will increase by
approximately 200-300 basis points, and adjusted earnings per share
from continuing operations will decrease by 5 to 10 percent,
compared to previous guidance provided on November 2, 2017 at the
Company’s third quarter earnings call. Additional financial details
will be provided during the Company’s fourth quarter and full-year
2017 earnings call.
As closing of the proposed transaction will likely take place in
second quarter 2018, MicroPort expects that the proposed
transaction will have no impact to the company’s 2017 net profit.
The proposed transaction will constitute a Major Transaction of
MicroPort under the Listing Rules of the Hong Kong Stock Exchange.
Accordingly, MicroPort has issued a Transaction Announcement with
the HKSE contemporaneous with this press release and will issue to
its shareholders a Transaction Circular with more detailed
financial information of the proposed transaction by end of Q1
2018. In addition, MicroPort will provide additional financial
details of the transaction during its 2017 earnings call
anticipated to be held in April 2018.
Advisors
Barclays is serving as financial advisor to LivaNova and Latham
& Watkins LLP is serving as legal counsel. Kirkland & Ellis
LLP is serving as legal counsel to MicroPort.
About MicroPort
MicroPort Scientific Corporation (“MicroPort") is a leading
medical device company with business focusing on innovating,
manufacturing, and marketing high-quality and high-end medical
devices globally. With a diverse portfolio of products now being
used at an average rate of one for every 15 seconds in thousands of
major hospitals around the world, MicroPort maintains world-wide
operations in a broad range of business segments including
Cardiovascular, Orthopedic, Endovascular, Neurovascular,
Electrophysiology, Surgical Management, Diabetes Care and
Endocrinal Management, and others. MicroPort is committed to its
vision of being a patient oriented global enterprise, improving and
reshaping patient lives through application of innovative science
and technology.
For more information, please refer to: www.microport.com.
About LivaNova
LivaNova PLC is a global medical technology company built on
nearly five decades of experience and a relentless commitment to
improve the lives of patients around the world. LivaNova’s advanced
technologies and breakthrough treatments provide meaningful
solutions for the benefit of patients, healthcare professionals and
healthcare systems. Headquartered in London and with a presence in
more than 100 countries worldwide, the company employs more than
4,500 employees. LivaNova operates as three business franchises:
Cardiac Surgery, Neuromodulation and Cardiac Rhythm Management,
with operating headquarters in Mirandola (Italy), Houston (U.S.A.)
and Clamart (France), respectively.
For more information, please visit www.livanova.com.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended. Forward-looking statements are
not historical facts but are based on certain assumptions of
management and describe LivaNova’s future plans, strategies and
expectations. Forward-looking statements can generally be
identified by the use of forward-looking terminology, including,
but not limited to, "may," “could,” “seek,” “guidance,” “predict,”
“potential,” “likely,” "believe," "will," "expect," "anticipate,"
"estimate," "plan," "intend," "forecast," or variations of these
terms and similar expressions, or the negative of these terms or
similar expressions. Forward-looking statements contained in this
press release are based on information presently available to
LivaNova and assumptions that LivaNova believes to be reasonable,
but are inherently uncertain. As a result, LivaNova’s actual
results, performance or achievements may differ materially from
those expressed or implied by these forward-looking statements,
which are not guarantees of future performance or actions that may
be taken by LivaNova and involve known and unknown risks,
uncertainties and other factors that are, in some cases, beyond
LivaNova’s control. Investors are cautioned that all such
statements involve risks and uncertainties, including without
limitation, statements concerning the intended sale of the CRM
business franchise or the likelihood or timing of the contemplated
transaction. Important factors that may cause actual results to
differ include, but are not limited to: (i) the ability of LivaNova
to successfully complete the sale of the CRM business franchise;
(ii) failure to obtain applicable regulatory or other approvals in
a timely manner or otherwise; (iii) failure to satisfy other
conditions to the proposed transaction; (iv) the length of time
necessary to consummate the proposed transaction, which may be
longer than anticipated for various reasons; and (v) unexpected
costs or liabilities that may arise from the sale of the CRM
business franchise. The foregoing list of factors is not
exhaustive. You should carefully consider the foregoing factors and
the other risks and uncertainties that affect LivaNova’s business,
including those described in the “Risk Factors” section of
LivaNova’s Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and other documents filed from
time to time with the United States Securities and Exchange
Commission. LivaNova does not give any assurance (1) that LivaNova
will achieve its expectations, or (2) concerning any result or the
timing thereof, in each case, with respect to any regulatory
action, administrative proceedings, government investigations,
litigation, warning letters, consent decree, cost reductions,
business strategies, earnings or revenue trends or future financial
results.
All information in this press release is as of the date of its
release. LivaNova does not undertake or assume any obligation to
update publicly any of the forward-looking statements in this press
release to reflect actual results, new information or future
events, changes in assumptions or changes in other factors
affecting forward-looking statements, except to the extent required
by applicable law. If we update one or more forward-looking
statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking
statements. We caution you not to place undue reliance on any
forward-looking statements, which are made only as of the date of
this press release.
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version on businesswire.com: http://www.businesswire.com/news/home/20171120005411/en/
LivaNova PLC Investor Relations and MediaKaren
King, +1 (281) 228-7262Vice President, Investor Relations &
Corporate CommunicationsorDeanna Wilke, +1 (281)
727-2764Corporate External Communications
ManagerCorporate.Communications@LivaNova.comorMedia Contact
(General)Joele Frank, Wilkinson Brimmer KatcherAndy Brimmer /
Sharon Stern / Ed Trissel+1 (212)
355-4449LIVN-jf@joelefrank.comorMedia Contact
(France)VolanovAlexis Volanov, +33 6 16 58 31
10alexis.volanov@volanov.comorMedia Contact (Italy)Luigi
Norsa & Associati S.r.L.Luigi Norsa, +39 335 710 47
51luigi@luiginorsa.comorMicroPortLeanne Li, +86 (21)
38954600Board Secretary and Vice President of Corporate General
Affairsir@microport.com
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