Getinge has begun a deal to acquire Paragonix Technologies, an organ transport products and services company, for an aggregated price of about $477 million. The transaction includes both upfront and earn out payments.
 
The Swedish company said acquiring Paragonix complements and enhances its acute heart and lung support products already being used alongside transplantation, moving its position forward in the quickly-growing organ preservation and transportation market.
 
Combining Paragonix ‘s offering and pipeline with its expertise and offering in the acute heart and lung support, digital technology and services, creates a very attractive offering, Getinge said.
 
“We are excited to enter the organ preservation and transportation market which is rapidly evolving, driven by a global shortage of organs and the pressing need to increase transplantation volume,” said Getinge’s president of Acute Therapies, Elin Frostehav. “Teaming up with Paragonix Technologies’ talented team and proven technology is not just a strategic fit for Getinge, it is a catalyst to redefine the market standard, especially considering our expertise in the acute heart and lung support segment and our existing global sales network.”
 
Privately-held, Waltham, Mass.-based Paragonix was founded in 2010 and has a workforce of about 100 people. The company posted $43.1 million of revenue last year, a substantial 136% rise over the previous year. Almost all of its sales come from the U.S. market. The market dominant U.S. cardiothoracic organ preservation technology provider is also rapidly expanding in abdominal transplantation.
 
In June, the company launched its PancreasPak Organ Preservation System, the first FDA-cleared device designed to protect and monitor donor pancreases during transportation. Earlier this month, Paragonix celebrated the first pediatric donor liver using its LIVERguard preservation system.

The company further serves the transplant community with clinical research initiatives, smart digital logistics platforms, and national clinical services networks. Paragonix said it hopes Getinge’s extensive resources and global distribution network will accelerate availability of its novel organ preservation technologies.
 
Getinge expects the acquisition to have a slightly negative effect on adjusted earnings per share (EPS). The deal is anticipated to close late Q3 or early Q4 of this year.
 
“We are thrilled to join forces with Getinge,” said Dr. Lisa Anderson, CEO and president of Paragonix. “Our product portfolio, transplant services, and robust clinical data position us as an industry leader. Together, we look forward to making a broad clinical impact, improving patient care, and launching new innovations in transplantation and end-stage organ failure. With Getinge’s global sales footprint, we can now extend our technologies and solutions to underserved patient populations worldwide.”

Deal specifics and rationale

Transplantation system reforms enacted in 2019 and the potential to use organs from previously underused donor pools have quickly accelerated the market. The U.S. has over 100,000 patients on the organ waiting list, and the total combined organ transplant market is predicted to top $10 billion by 2033, Getinge cited. 

The acquisition allows the company to provide solutions across the entire transplant workflow, complementing and synergizing with existing pre- and post-transplant patient support products in the acute heart & lung support segment while also serving the adjacent kidney, liver, and pancreas markets.
 
The aggregated upfront purchase price and expected additional earnout payments in 2024-2026 are about $477 million, on a cash and debt-free basis, for all issued and outstanding shares, of which $253 million is payable in cash on closing.
 
Earn-out payments are expected to be paid between 2024 and 2026 if agreed upon regulatory and financial performance milestones are achieved and may exceed $277 million in total.