Surmodics Soars as Private Equity Firm GTCR Announces Acquisition

Surmodics, a medical device company based in Eden Prairie, saw its stock soar on Wednesday following the announcement of its impending sale to private equity firm GTCR. The Chicago-based firm will acquire Surmodics for $627 million, or $43 per share, pending shareholder and regulatory approval.

GTCR, which focuses on investments in the healthcare and technology sectors, recently announced an $11.5 billion fund to acquire companies in various industries. The firm currently manages $40 billion in equity capital.

Surmodics, known for its components for medical devices such as coatings and in vitro diagnostic tests, has projected revenue of $122 million to $124 million for the fiscal year. The company generates over 29% of its sales from coatings sold to other medical device companies, making it an attractive target for private equity investment.

Despite a recent decline in sales, Surmodics remains a key player in the medical device industry, with business partnerships with major companies like Medtronic and Abbott. The company’s CEO, Gary Maharaj, expressed confidence in the sale, stating that it will benefit physicians, patients, and customers.

In response to delays in FDA approval for its SurVeil drug-coated balloon, Surmodics cut 13% of its staff earlier this year. The device was eventually approved in June 2023, leading to the company’s decision to sell to GTCR.

Analysts believe that the private equity deal with GTCR makes sense for Surmodics, as the firm has a strong track record in the industry. With the acquisition, GTCR aims to expand Surmodics’ offerings and reach in the market.

As of September 30, Surmodics had 376 employees, with a significant portion based outside the U.S. The company’s acquisition of Ireland-based Vetex Medical in 2021 has contributed to its global presence.

Representatives from GTCR declined to comment further on the acquisition. The transaction is expected to close in the second half of the year, marking a new chapter for Surmodics as a privately held company.