ArthroCare Acquires ENTrigue Surgical Inc.

ArthroCare Corp., an Austin,Texas-based developer of minimally invasive surgical products, has acquired ENTrigue Surgical, Inc., a privately held maker of sinus implants and surgical tools, for $45 million in cash.

ArthroCare already sells some ENT-related (ear, nose and throat) products. But the company said its acquisition of San Antonio, Texas-based ENTrigue will add some complementary items to the mix. ENTrigue makes and sells implants, disposables and surgical instruments targeted to endoscopic sinus surgery.

ArthroCare notes that 500,000 sinusitis patients face surgery in the United States each year. And more than 30 million Americans face sinusitis problems. Industry analysts believe ArthroCare clearly is planning for the future in beefing up its own sinus-related device and surgical tool offerings with ENTrigue’s surgical devices, which now will operate within ArthroCare’s ENT product area as a complement to its Coblation and Rapid Rhino product lines.

Beyond the obvious advantages, ArthroCare’s acquisition could help lift flat revenue and prevent a further decline in net income. During the fiscal 2013 first quarter (ended March 31), ear, nose and throat surgical product sales grew 8.8 percent internationally but dropped 9.3 percent in the Americas. The company booked $11.2 million in net income during the quarter, versus nearly $13 million over the 2012 first quarter. Revenue, at $92.3 million, was essentially flat year over year.

While the sale price is $45 million, ArthroCare may end up paying more down the line. The deal gives previous ENTrigue shareholders the right “to receive contingent consideration” on the anniversary of the sale closing over five years, based on net sales increases of ENTrigue products.