Dive Brief:
- A judge has denied the Federal Trade Commission’s request to block the $627 million takeover of Surmodics by the private equity company GTCR, Surmodics said Monday.
- The ruling removes one barrier to the deal. The acquisition remains subject to a restraining order that expires on Nov. 17 and to closing conditions, according to the announcement.
- Surmodics CEO Gary Maharaj said in a statement that the ruling “is a significant step toward being able to complete the merger.”
Dive Insight:
GTCR agreed to buy Surmodics, a maker of medical device coatings and diagnostics components, in May 2024 and aimed to close the deal later that year. However, the FTC challenged the deal in March, arguing that the buyout “would lead to a highly concentrated market for outsourced hydrophilic coatings and eliminate significant head-to-head competition.” Two states joined the challenge in April.
Opposition to the deal reflects GTCR’s majority stake in Biocoat, another coating company. The FTC has said that Surmodics and Biocoat are, respectively, the largest and second-largest provider of hydrophilic coatings. Together, the companies control over 50% of the market, according to the FTC.
GTCR moved to mitigate the concerns by striking a deal to divest part of Biocoat’s hydrophilic coatings business to Integer, a medical device contract development and manufacturing organization. The FTC told the court that the divestiture “suffers from fatal shortcomings” and would provide “only a piecemeal set of assets that are insufficient to enable a new entrant to compete.”
Yet the court denied the FTC’s request for a preliminary injunction that would have stopped GTCR from buying Surmodics. According to Reuters, the judge said the divestiture would address competition concerns, and the FTC failed to factor in the competitive pressure from medtech companies’ in-house coating capabilities.
