The U.S. Federal Trade Commission has moved to block the $627 million acquisition of the cardiovascular devicemaker Surmodics by the private equity firm GTCR, over a potential plan to combine the company with another manufacturer of coatings for medical hardware.
The government competition watchdog said that merging Surmodics with Biocoat, where GTCR holds a majority stake, would result in a single company controlling more than 50% of the market for outsourced hydrophilic coatings—a necessary feature to ease friction on tools used inside the body, such as the catheters and guidewires employed in minimally invasive procedures to replace heart valves or treat strokes in the brain.
Surmodics is currently the largest provider of these medical device coatings, followed by Biocoat in second place, according to the agency. The FTC said that the head-to-head competition between these two companies has led to lower prices and more innovative coatings utilized by other product developers.
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“Medical device makers rely on high-quality coatings in designing and bringing to market life-saving devices, such as neurovascular catheters,” said Daniel Guarnera, director of the FTC’s competition bureau, which is suing to block the deal in a federal court in northern Illinois. “This merger threatens to disrupt competitive dynamics that have ultimately benefited patients.”
The acquisition was first pitched in May 2024, with a $43 per-share price amounting to a 41% premium over Surmodics’ average stock value at the time. GTCR’s initial announcement did not mention plans to combine it with Biocoat.
In a statement, Surmodics said it plans to “vigorously defend this case in court.”
“Surmodics respectfully disagrees with the FTC's decision and remains committed to completing the Merger,” the Minnesota-based company said. “Surmodics remains confident in both its rationale for the Merger and the value it will bring to all stakeholders, including shareholders, customers and patients. We have worked constructively with the FTC over the last several months to secure regulatory approval for the Merger and are disappointed by its decision to initiate litigation, as the Merger is pro-competitive.”