Israeli Replacement Heart-valve Maker Valtech Cardio to Be Acquired for Up to $1 Billion

Valtech’s technology is used to treat the most common forms of mitral heart valve conditions.

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The Or Yehuda-based Valtech Cardio, which develops replacement heart valves, is being acquired by HeartWare International of the United States for a purchase price that could reach one billion dollars. Prior to its acquisition, investment in Valtech, which was founded in 2006, was limited to the relatively modest sum of $70 million.

Valtech’s technology is used to treat the most common forms of mitral heart valve conditions, mitral valve regurgitation and tricuspid valve regurgitation. The initial investor in the company, which employs a staff of 50, was the Peregrine Ventures fund, which holds a 10% stake in Valtech for a relatively small investment of 1.5 million. Valtech got its start at a Peregrine incubator.

Under the terms of the acquisition, on closing, HeartWave, which is based in Framingham, Massachusetts, and is traded on the Nasdaq exchange at a market value of $1.4 billion, will provide $356 million in HeartWave stock to Valtech’s stakeholders and another $65 million in stock once a second Valtech product, Cardioband, receives CE mark approval, authorizing it for sale in Europe.

Valtech’s shareholders will get warrants worth between $60 million and $120 million after the company attains $75 million sales in a 12-month period. The owners of Valtech will also get $375 million in cash or stock, at HeartWave’s discretion, after Valtech’s 12-month product sales reach $540 million. It is though that Valtech will attain that goal within three or four years, but the additional compensation will be paid Valtech shareholders even if the sales level isn’t reached for ten years.

In addition to Peregrine, other investors in privately-held Valtech include OXO Capital Valve Ventures, NGN Biomed Opportunity II, Valtech CEO Amir Gross, his father, Yossi Gross and company employees.