Baxter International to buy Fusion Medical Technologies for 32 times revenue

Weekly Corporate Growth Report, Mar 4, 2002

The Deal: Baxter International Inc. has agreed to purchase Fusion Medical Technologies Inc. for approximately $157 million in Baxter stock (about $10.00 per share of Fusion). The deal remains subject to approval by Fusion shareholders and regulatory authorities.

Discussion: Fusion Medical Technologies makes surgical sealant for use in cardiac, vascular, spinal, and cranial procedures. The company's main product, FloSeal, combines collagen-based gel and the blood-clotting enzyme thrombin to seal surgical incisions and stop them from bleeding. Fusion is also developing a FloSeal sponge for trauma and first aid situations.

Baxter International makes equipment to collect and separate blood and blood components. The company also develops plasma protein therapies for such blood-related disorders as hemophilia. Baxter is a leading maker of intravenous (IV) supplies and solutions, and also manufactures renal dialysis systems.

Acquiring Fusion expands Baxter's portfolio of biotherapeutic solutions for surgery. Thomas Glanzmann, the president of Baxter's Biosicence division, noted, "Fusion's expertise in collagen and gelatin-based products complements Baxter's strength in fibrin-based technologies. With the combination, we will be able to offer surgeons an array of solutions to seal tissue, enhance wound healing, and manage hemostasis."