ArthoCare buys out Calif.’s Eleven Blade (Austin Business Journal)
Medical device maker ArthroCare Corp.has reached a $7 million stock purchase agreement with a similar California company.
Austin-based ArthroCare (Nasdaq: ARTC) disclosed Friday the agreement to buy all the issued and outstanding capital stock of Eleven Blade Solutions Inc., according to a filing with the U.S. Securities and Exchange Commission.
Eleven Blade, which doesn’t appear to have a website, will receive certain contingent consideration after the closing based on the net sales of the company’s products using the Q-Fix implant equal to 8 percent of the net sales of the Q-Fix product. Also, the deal is conditioned upon Eleven Blade obtaining U.S. Food and Drug Administration clearance for certain suture-based anchor products, the filing indicates.
ArthroCare, which was founded in 1993, also develops surgical products designed to enable minimally invasive procedures. The company employs about 1,600 workers.
In November, it reported a third-quarter profit of $9.9 million and revenue of $86.9 million compared with a $2.4 million profit on revenue of $83.2 million during the same quarter in 2011.
ArthroCare is being investigated by the U.S. Department of Justice for activities that include past sales, accounting and billing procedures related to the operation of its spine product sales. The DOJ is also reviewing the company’s relationship with its DiscoCare Inc. division, according to SEC filings.
ArthroCare has operated at a loss three of the last four years. In 2011, it posted a $900,000 loss on revenue of $354.8 million versus a profit of $37.1 million revenue of $355.3 million during 2010.