CryoLife Buys Graft Company for $17M

Kennesaw-based CryoLife, Inc. announced today plans to acquire Hemosphere, Inc. in a $17 million cash deal.

CryoLife, a tissue processing and medical device company focused on cardiac and vascular surgery, said it signed an agreement with the Minnesota-based medical device company, which develops and markets the Hemodialysis Reliable Outflow (HeRO) Graft.

"The HeRO Graft is a unique solution for hemodialysis patients that have blocked or damaged central veins that require a permanent alternative access," said CryoLife President and CEO Steven Anderson in a statement. "Patients benefit from a lower infection rate and enhanced hemodialysis as compared to TDCs, which cross the skin. Once implanted, the device is easily accessed similar to conventional grafts."

According to Hemosphere President and CEO Patrick Wethington, the HeRO Graft has been clinically proven to reduce bacteria in the blood by 69 percent as compared to patients with tunneled dialysis catheters.

"With over 5,000 HeRO kits sold and nearly 100 clinical publications and presentations, we believe CryoLife's established corporate infrastructure and resources will be beneficial in expanding patient access and further enhancing the HeRO Graft system," Wethington said.

In addition to the $17 million cash, the deal also includes milestone-based payments of up to $4.5 million.

Hemosphere had revenues of $5.3 million with gross margins of 65.6 percent in 2011. Assuming the transaction closes in May as anticipated, CryoLife said it expects revenues of between $2.5 million and $3.5 million for the Hemosphere product line in 2012.