Making the Deal: Complementary Acquisition Strengthens Market Position

With Merit behind ClariVein, the procedure will reach more patients.
By Fred P. Lampropoulos, Chairman and CEO, Merit Medical

While you can define innovation in myriad ways, in business, there are two categories of new ideas: those that are entirely novel and have never been seen or heard before, and those that take an existing idea or product and make it better.

In the world of medical devices, it is pretty rare to encounter entirely novel ideas. Truly disruptive technologies are hard to come by. Indeed, the lion’s share of research and development in this space is dedicated to innovation and substantiating that innovation: be the possibilities of new uses for existing devices or new devices that enhance existing technology. In some ways, the entire 510(k) premarket notification process, with its reliance on predicate devices for purposes of classification, somewhat encourages manufacturers to base innovation on existing ideas.

One reading of these facts suggests there are limits on innovation as a growth strategy for device manufacturers: there is finite capacity by which most existing technology can be improved, and “me too” products are historically bad investments. On the other hand, untethering innovation from the notion of novelty can also be liberating, especially if it allows a business entity to explore new ideas through partnership and acquisition. In this regard, innovation is, in fact, limitless, and can be viewed as a key driver of growth and expansion.

Merit Medical has adopted this more optimistic viewpoint on innovation as an element of our overall business strategy. While our internal spend on research and development ranges from $60 to $80 million annually, a healthy portion of our product growth is based on acquisitions and partnerships. Prominently, Merit’s expansion in the peripheral intervention market over the past few years is a direct byproduct of this multi-pronged approach to innovation, with internal spend complementing efforts to acquire or partner with innovators already in the space.

Filling a Void

In 1987, Merit Medical’s founders had a vision for a customer-focused healthcare company that truly understood customers’ needs. We have always emphasized innovation as we continually seek to bring a diverse range of products to the market. At its core, Merit Medical is driven by a commitment to improving the lives of patients and enhancing options for use in offices and clinics worldwide.

These values are a key reason we decided to pursue the acquisition of assets held by Vascular Insights, including the ClariVein IC and ClariVein OC specialty infusion catheter systems. From the patient perspective, ClariVein is associated with minimal postoperative pain and fast recovery—two aspects that would seem to improve patients’ experiences after a procedure. For providers, the small profile, good imaging visualization, and ease of steerability of the device are complementary in making ClariVein IC a more efficient and easier to operate infusion catheter system compared to similar on-market devices. Another attractive aspect of ClariVein to Merit as a company was that it synergized with our existing peripheral intervention portfolio, giving us one more option for supporting procedures from stick to stitch.

Certainly, growing a product portfolio to serve a shared customer base better is nothing new. The purchase of Possis Medical by Bayer HealthCare affiliate MEDRAD in 2008 demonstrated this approach in the cardiovascular market. At the time of the sale, Possis was viewed as a leading provider of mechanical thrombectomy devices used to treat narrowed or blocked arteries, while MEDRAD’s strength was in providing contrast injection systems used to diagnose cardiovascular and other diseases. Intuitively, the combination of these complementary products allowed Bayer to offer its customers a wider range of support for cardiovascular intervention procedures.

Tucking In

Merit Medical has been a part of a few dozen acquisitions (or “tuck-ins”) over the years. The most successful of these ventures share some common elements:

  • The product fit into one of our existing franchises;
  • The market share was scalable, with the potential to grow the existing business; and
  • The new product added a source of revenue.

ClariVein is an example of an acquisition that delivered on all three of these principles. Our experience in serving the interventional radiology and vascular surgery markets led us to believe we had a roadmap for ensuring the product could meet and exceed its market potential. Merit also has an existing global reach in its sales and distribution networks, and certainly, the unmet need in vascular disease is not confined to the United States or Europe; rather, we see tremendous potential to grow sales in countries like South Korea, China, Brazil, and Mexico, among others. Combined, these factors suggested that ClariVein would represent both a new revenue stream and one that was ripe for organic growth.

On their own, the ClariVein systems address a $700 million global market. That already impressive market potential is further enhanced for Merit specifically because the product could be a touchpoint for engaging new customers interested in our vascular access portfolio, or else prove to be an additional consideration for providers as they seek to customize their approach in the clinic.

While in our case, tucking in provided growth through synergistic integration, other examples from the market demonstrate other ways acquisitional growth benefits device manufacturers. In mid-2009, Covidien completed an acquisition of VNUS Medical Technologies, Inc., including its VNUS Closure System. Similar to Merit’s purchase of ClariVein, the move opened new growth opportunities for the flagship product via the extensive global resources already in-house at Covidien. However, five years later, when Covidien completed a $42.9 billion merger with Medtronic, another aspect of scaling through integration came to light. In the case of the latter, roughly $1.2 billion in cost synergies from two entities with relatively little product overlap helped accelerate revenue growth for Medtronic while driving a 37.5% year-over-year uptick in stock price. Indeed, the acquisition strategy mindset offers myriad potential to recognize significant cost savings that can be a boon to the balance sheet, above and beyond the potential for new product sales opportunities.

Interestingly, just prior to completing this merger, each participant engaged in a rather aggressive acquisition effort geared toward increasing a footprint in the vascular market: Covidien scooped up Reverse Medical and its line of vascular devices, as well as Sapheon and its VenaSeal device; and Medtronic further diversified itself with purchases of Sapiens SBS and NGC Medical SpA.


Over the years, Merit has adopted a comprehensive approach to innovation. New product development will always be fundamental to our growth as a company, and yet we have found new ways to innovate through the thoughtful and carefully considered acquisition of products that complement, synergize with, and enhance our existing offerings. To further support clinicians and the procedures they perform, Merit also sponsors targeted educational courses that are about far more than learning to use our products. The various seminars and symposia we organize have evolved into a platform for engaging information exchanges regarding the latest science, where global leaders in their field share the latest developments, tips, and techniques for serving patients’ needs. Overall, our objective in providing physician education in a peer-to-peer format is to better serve our customers by providing a venue to give new (and even innovative) ideas space to grow.

Venturing into a new market or considering a purchase of another company or its assets can be a risky proposition from a business investment standpoint. However, the risk can be somewhat mitigated by careful due diligence to ensure the expansion will truly represent a growth opportunity. The new venture should also serve to enhance core corporate values. With respect to Merit’s purchase of the ClariVein franchises, we saw tremendous opportunity to enhance our ability to service the peripheral vascular market while staying true to our central belief in the role of innovation as a growth strategy. To us, the purchase fit perfectly with the idea of taking our existing business and making it better.

What is ClariVein?

Controlled Dispersion to Peripheral Vasculature

ClariVein IC is a specialty infusion catheter designed for the controlled 360-degree dispersion of physician-specified agents to the peripheral vasculature. This fully disposable device is minimally invasive, efficient, easy to use, and has many benefits, including minimal postoperative pain and faster recovery.

Motor Drive Unit

  • Responsible for the wire rotation
  • Self-Contained & Disposable: Fully self-contained, single-use device with no need for capital equipment purchase
  • Single-Handed Operation: Motor Drive Unit (MDU) designed to be fully operational with one hand
  • Variable Rotating Speed: Multiple speed settings allow for rotating wire and dispersion ball to rotate between approximately 2,000 and 3,500 RPM
  • Power System: MDU is operated by a low voltage, self-contained power system

Catheter Assembly

  • Includes infusion catheter, rotating wire, and dispersion ball together in a cartridge for secure fastening to the MDU
  • Small Profile: <3 Fr infusion catheter
  • Flexibility: Flexible coaxial infusion catheter has a rotating wire and a dispersion ball at the distal tip
  • Good Imaging Visualization: Rotating wire and dispersion ball is easily identifiable under imaging guidance
  • Ease of Navigation: Low profile design and steerability aid navigation.
  • Visibility: Radiopaque markers for predictable pullback and infusion
  • Custom Fit: Multiple catheter lengths available; select size based on patient anatomy and desired tip location

ClariVein by the Numbers

  • The purchase price was $40 million
  • Additional milestone payments that could amount to an additional $20 million
  • Addresses a $700 million global market
  • ClariVein IC system has a 510(k) clearance
  • ClariVein OC system is CE-marked