Becton deal could help Aortech double in size

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The Independent Online

Aortech International will double in size if its planned purchase of the critical care unit of Becton Dickinson, the American medical technology company, for $52m (£36m) goes ahead.

The company expects to pay around half the purchase price over 30 months, subject to sales performance, and to fund an initial payment from debt finance and cash resources. The deal will need the backing of AorTech's shareholders before it can be completed.

Becton Dickinson's critical care business makes and sells speciality catheters, pressure transducers and supplies for patient monitoring. It had sales of $47m in the year ended 30 September.

The Glasgow-based medical equipment maker, which yesterday signed a letter of intent with Becton, said: "Negotiations concerning the definitive agreement between the parties are continuing and a final announcement on the terms of the acquisition will be made in due course."

Eddie McDaid, AorTech's chairman and chief executive, said: "The acquisition of this business will add a complementary range of products, which is expected to enhance market penetration of our Truccoms system throughout the world."

AorTech's Truccoms valve product helps surgeons and anaesthetists monitor patients' hearts more effectively during open heart surgery. Analysts estimate the market for the product could be worth $200m a year and see it as a key driver of AorTech's growth.

The company already has a business relationship with Becton Dickinson, which markets the Truccoms product in Europe on an exclusive basis.

Shares in AorTech, which makes heart valves and monitors, slipped 1p to 106.5p – far below the 1,030.75p high hit in late 1999.

Back in December AorTech reported losses in the six months to 30 September had widened to £5m as development costs mounted. Turnover rose a healthy 13 per cent to £1.98m.

The business is expected to move into profit in two years' time.

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