Dive Brief:
- Getinge has agreed to buy Paragonix Technologies, a maker of devices to preserve organs during transportation, in a deal worth up to $477 million.
- Getinge will pay $253 million in cash at closing, with additional milestone payments that may exceed $224 million, according to the Thursday announcement. The Swedish company expects to make the milestone payments between 2024 and 2026 if certain regulatory and financial goals are met.
- In 2023, Paragonix brought in $43.1 million in revenue, representing year-over-year growth of 136%, a factor Getinge highlighted as motivation for the purchase.
Dive Insight:
Paragonix, a privately held company based in Waltham, Massachusetts, makes products to keep organs cool while transporting them, as well as an app to allow healthcare facilities to track devices and monitor temperature. Paragonix has offerings for heart, liver and lung preservation.
The company, which has about 100 employees, also offers services to procure organs from hospitals.
Getinge explained the strategy of the acquisition as a way to capitalize on a market where the space is moving away from the traditional method of preserving organs in commercial-grade coolers and ice to more tech-based products, such as Paragonix’s devices. The company said the market is expected to grow by double digits and eclipse $10 billion in 2033, adding that Paragonix “outgrows the market significantly.”
There is also untapped potential to grow internationally, Getinge said, as nearly 100% of Paragonix’s sales come in the U.S.
“We are excited to enter the organ preservation and transportation market which is rapidly evolving, driven by a global shortage of organs and the pressing need to increase transplantation volume,” Elin Frostehav, Getinge’s president of acute care therapies, said in the announcement.
Getinge’s products include equipment for the intensive care unit, operating room and cardiovascular surgeries, such as ventilators, anesthesia machines and a device to lift and position the heart during off-pump bypass surgery.
Gaining Paragonix will allow Getinge to provide products used throughout the entire transplant process, according to the announcement.
Getinge said the deal will close in the late third or early fourth quarter. The company expects the acquisition to have a slightly negative impact on adjusted earnings per share in 2024 and a positive contribution beginning in 2028.
