Case Study: ATS Medical, Inc.

ATS Medical was proactively identified as an attractive opportunity for investment as a result of extensive due diligence in the cardiac surgery space.  ATS quickly rose to the top of diversified companies in cardiac surgery, leading Essex Woodlands to initiate and develop a strong relationship with ATS management.  During this time ATS maintained strong sales growth (20% CAGR) and became profitable in 4Q/2008. 

Michael Dale, CEO, approached Essex Woodlands exclusively in Fall 2008 about an equity investment that would 1) allow ATS to fund small tuck-in acquisitions, 2) settle old litigation related to the mechanical valve market and 3) provide working capital for growth through sales and marketing.  A $20M PIPE was completed in December 2008 and Marty Sutter assumed a Board seat on the Board of Directors. 

Over the course of the investment, the company’s top line grew 15% with impressive growth in tissue valves and cryoablation, and a full suite of R&D including percutaenous valves.  In April 2010, Medtronic announced the acquisition of ATS Medical for $4.00/share for a total firm value of $370M.  The price represents a 54% premium over ATS’ prior day closing price and a 4.5x 2010 E sales.