Medical device company CooperCompanies (NYSE: COO) is set to acquire medical device manufacturer Cook Medical’s reproductive health business within the MedSurg division, increasing Cooper’s fertility and medical device offerings.
Pursuant to the deal, CooperCompanies will spend $875 million cash for the acquisition, comprising $675 million at closing and four $50 million annual installments totaling $200 million.
Cook has focused on reproductive health, specifically products for OB-GYNs, in vitro fertilization (IVF) and assisted reproductive technology. According to the press release, Cook’s reproductive health business makes “minimally invasive medical devices focused on fertility, obstetrics and gynecology.” For example, Cook developed the first IVF-specific needle. MeanwhileCooper has focused on reproductive health as well as vision medical devices through its CooperSurgical and CooperVision divisions.
As noted in the filing, Cook’s reproductive health business had around $158 million in annual revenue for 2021, an increase of approximately 17%.
“We’re improving our international fertility footprint, especially within the Asia-Pacific region, and adding highly synergistic and respected labor and delivery devices to our ObGyn portfolio,” CooperCompanies President and CEO, Al White, said in a press release. “These high-quality products will integrate seamlessly into our business and support CooperSurgical’s vision of a world with healthy women, babies and families.”
Subsequently, the deal is expected to be accretive to non-GAAP earnings per share by approximately $0.60 in the first year after the deal closes, but this excludes one-time charges and deal-related amortization.
According to the filings, there is a $12 million of 1.37% indemnity deductible. Upon closing, Cook’s reproductive health business will become part of CooperSurgical.
Under the agreement, there will be a two-year transition period where Cook will produce products for CooperSurgical and it will ramp-up production capacity to keep pace with growth. The announcement stated that this would not negatively impact manufacturing jobs.
“This agreement represents more than a simple transaction; it is a commitment to offer a more complete range of solutions to customers and patients around the world,” D.J. Sirota, SVP of Cook Medical’s MedSurg specialty, said in a press release. “CooperSurgical is uniquely positioned to combine Cook’s reproductive health portfolio with their resources and plans to significantly invest in this product portfolio.”
The deal, announced on February 7, is subject to customary closing conditions and regulatory approval; no expected closing date was announced.
CooperCompanies is represented by Latham & Watkins LLP and Cook Medicals is represented by Ice Miller LLP.
Before the announcement, Cooper’s stock was at $388.66 on February 4, and when the deal was announced on February 7, stock closed at $386.90 and a week later on February 14, the stock was valued at $391.35.
This transaction comes after CooperCompanies announced it would acquire Generate Life Sciences for $1.6 billion in November 2021; the deal closed in December. Both acquisitions will expand Cooper’s offerings in fertility-related offerings.
