Acclarent, an Irvine-based maker of minimally invasive technologies for the ears, nose and throat sector, is being sold by parent Johnson & Johnson for $275 million to Integra LifeSciences Holdings Corp.
Integra, which is based in Princeton, N.J. (Nasdaq: IART), said the ear, nose and throat (ENT) category is a key area of strategic interest and highly complementary to the neurosurgery segment. Upon closing, Integra said it will be one of the leading providers of ENT products and technologies.
“This acquisition presents Integra with a rare opportunity to become a key player in the ENT segment,” Integra Chief Executive Jan De Witte said in a statement. “Acclarent’s culture of pioneering technologies aligns with Integra’s legacy of innovation to transform care and restore patients’ lives.”
The U.S. ENT specialty devices market is growing about 5% to 6% annually and will add approximately $1 billion to Integra’s global total addressable market, the company said.
The buyer praised Acclarent‘s portfolio of balloon technologies for sinus dilation and Eustachian tube dilation, as well as surgical navigation systems.
In the trading session after the announcement, shares of Integra rose 4% to $42.57 each and a $3.3 billion market cap.
Four Areas
Acclarent is part of Ethicon, a unit in Johnson & Johnson’s MedTech division. That division has 1,480 employees in Orange County, according to the Business Journal’s annual list of medical device makers.
Acclarent specializes in four areas:
- The Acclarent Aera Eustachian Tube Balloon Dilation system relives symptoms of Eustachian tube dysfunction, a persistent illness that affects about 5% of the population.
- The Inspira Air Balloon Dilation System treats postintubation tracheal stenosis.
- The TruDi Navigation System software provides real-time 3D visualization.
- Acclarent also has products to treat nasal airway obstruction and sinusitis.
While more than 30 million Americans are diagnosed with chronic sinusitis, only approximately 800,000 receive surgical treatment.
In February, Acclarent announced its TruDi Shaver Blade began being used on patients, which it says allows physicians to deliver more consistent and accurate sinus procedures.
“We are championing transformational innovation to drive better outcomes for people struggling with ENT conditions,” Acclarent Worldwide President Jeff Hopkins said last February.
“We are excited for the first uses of the TruDi Shaver Blade because we believe it can bring significant value to physicians.”
Opportunities
Acclarent generated $110 million in 2022; its gross margins are in line with Integra’s company average. Acclarent maintains R&D facilities in Irvine and Haifa, Israel, and uses third-party manufacturers.
“This acquisition will provide opportunities for ENT and neurosurgeons to closely collaborate on tumor care using skull base approaches,” said Mike McBreen, president of Integra’s Codman Specialty Surgical division, which will absorb Acclarent.
“Acclarent’s strong commercial capabilities, R&D expertise, advanced portfolio and deep clinical knowledge will be important assets to Integra, allowing us to deliver future innovation not only within ENT, but also across our other CSS technology platforms.”
The transaction, which is projected to close by the second quarter, is expected to be accretive to Integra’s long-range plan, the company said.
Goldman, Sachs & Co. is serving as exclusive financial adviser and Morgan, Lewis & Bockius LLP is acting as legal adviser to Integra.
