Merit Medical to acquire C2 CryoBalloon device for $22M, sees dilution

Merit Medical (MMSI) announced it has signed a definitive asset purchase agreement with Pentax of America, a subsidiary of Pentax Medical to acquire the C2 CryoBalloon device and related technology. The closing of the proposed transaction is expected to occur during the fourth quarter of 2025, subject to the receipt or waiver of certain customary closing conditions. The C2 CryoBalloon delivers controlled freezing treatments to drive targeted ablation and precise destruction of unwanted soft tissue. Merit intends to integrate the C2 CryoBalloon business into its Endoscopy portfolio. Over the next few months, Merit plans to transfer product manufacturing to its facility in South Jordan, Utah. Merit anticipates that some of the Pentax employees currently engaged in the C2 CryoBalloon business will be joining Merit. Merit proposes to acquire the C2 CryoBalloon assets from Pentax for total purchase consideration of $22M, consisting of a $19M cash payment at closing and potential contingent payments of up to $3M payable upon meeting certain milestones. The acquired assets are projected to contribute revenue, from a projected closing date of November 1 through December 31 of approximately $1M and are projected, during the same period of time, to dilute Merit’s previously forecasted non-GAAP net income and non-GAAP earnings per share, by approximately $0.4M and 1c, respectively. The acquisition is projected to be dilutive to Merit’s FY25 GAAP net income and GAAP earnings per share by approximately $0.5M and 1c, respectively. The proposed acquisition is projected to contribute revenue in the range of approximately $6M to $8M for the twelve months ending December 31, 2026, and to be dilutive to Merit’s non-GAAP net income and non-GAAP earnings per share in the range of approximately $1M to $2M, or 2c-3c per share, respectively, and to be accretive thereafter. The proposed acquisition is projected to be dilutive to Merit’s GAAP net income and GAAP earnings per share in the range of approximately $2M-$3M, or 3c-5c per share, respectively.