Medtronic partners with CathWorks with option to acquire down the line

Medtronic (NYSE:MDT) announced today that it entered into a strategic partnership with coronary artery disease (CAD) technology developer CathWorks.

Under the agreement, Medtronic will invest up to $75 million and immediately begin co-promotion for CathWorks’ FFRangio system in the U.S. Europe and Japan, where it is commercially available. A separate agreement offers Medtronic the option to acquire CathWorks once certain undisclosed milestones are met.

According to a news release, CathWorks also has the right to compel Medtronic to acquire the company if Medtronic does not exercise the option, which expires in July of 2027 with an estimated value of up to $585 million and potential undisclosed earn-out payments post-acquisition.

Medtronic has held a minority investment in CathWorks since 2018. It expects the co-promotion agreement to be neutral to its fiscal 2023 GAAP and adjusted earnings per share and neutral-to-accretive thereafter.

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