ATS Medical to acquire 3F Therapeutics

By E. Janene Geiss

Philadelphia, Jan. 24 - ATS Medical, Inc. announced Tuesday that it has signed a definitive agreement to acquire all of the outstanding shares of privately held 3F Therapeutics in a stock-for-stock transaction.

3F Therapeutics is an early stage medical device company at the forefront of the emerging field of minimally invasive beating heart tissue valve replacement, according to a company news release.

The acquisition of 3F Therapeutics is viewed as a major step in executing ATS Medical's longstanding vision of obtaining a leadership position in all segments of the cardiac surgery market, officials said.

Under the terms of the definitive agreement, ATS will acquire 3F Therapeutics by issuing 9 million shares of ATS common stock to 3F shareholders. 3F shareholders also will be issued up to an additional 10 million shares of ATS stock upon the achievement of milestones, officials said.

ATS said it will assume the 3F balance sheet that includes an estimated $10 million in cash as of Dec. 1 to fund future development.

The transaction is expected to close in the second quarter of 2006, officials said.

The proposed acquisition is subject to ATS shareholder approval.

Piper Jaffray & Co. served as financial adviser to ATS, and UBS Securities LLC acted as financial adviser to 3F in connection with the transaction.

"The joining of ATS Medical and 3F Therapeutics firmly establishes ATS Medical as a leader and creates the most advanced heart valve therapy product portfolio in the world," Michael Dale, chairman, president and chief executive officer of ATS, said in the release.

"We are tremendously excited about how this transaction strengthens our company's position in the heart valve therapy space and further heightens our growth potential in the cardiac surgery market. It is a significant milestone toward achieving our long-term goal of building ATS Medical's annual revenue to a level in excess of $100 million," he added.

3F's unique heart valve product design concepts are intended to improve on the performance of existing heart valves by mimicking natural valves, officials said.

With the belief that there is not a single solution for each heart valve implant, 3F has worked toward offering cardiac surgeons several biological tissue heart valve options from which to choose. Its first product, the 3F Aortic Bioprosthesis, has been commercially released in Europe. In the United States, the Food and Drug Administration submission process is underway, officials said.

3F Therapeutics is an Irvine, Calif., medical device company with products to improve performance of heart valves presently in the market. The company holds in excess of 130 patents focused on a tubular valve concept that enables minimally invasive surgery to repair or replace heart valves.

ATS, based in Minneapolis, manufactures and markets products and services focused on cardiac surgery.

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