Medtronic to buy S.Korean insulin patch maker for $738 mn

Medtronic Plc., a Dublin, Ireland-based medical device maker, is set to acquire EOFlow Co., a South Korean wearable insulin patch maker, for $738 million to increase competitiveness in the global diabetes market.

Medtronic said on Thursday that it signed share purchase agreements (SPAs) with EOFlow CEO Jesse Kim and President Luis Malave to purchase all of their shares in the company at a price per share of 30,000 won ($22.6). That was 19.8% higher than 25,050 won, the closing stock price of the South Korean company on the day.

EOFlow separately said Kim, the current top shareholder, inked an SPA with Medtronic Korea Holdings to sell his 18.58% stake for 169.2 billion won in a filing to a South Korean financial regulator. Malave was estimated to hold a stake of less than 5%.

The US-listed company also decided to acquire new shares at 24,359 won apiece to fund EOFlow’s ongoing operational and research and development requirements.

In addition, Medtronic plans to undertake a public tender offer to acquire up to all outstanding public shares at the same price per share as to be paid to Kim and Malave.

“With these transactions, Medtronic intends to acquire all outstanding shares in EOFlow and delist it,” Medtronic said in a statement.

After the announcement, EOFlow’s share on Friday morning in the Seoul stock market jumped to 16.4% to 29,150 won, the highest since November 2021.

INSULIN PATCH

Medtronic aims to secure EOFlow’s insulin patch technology and market share through the deal, which is expected to expand its ability to treat more diabetes patients.

The South Korean company founded in 2011 manufactures EOPatch, a tubeless, wearable and fully disposable insulin delivery device, which features a proprietary microfluidic technology designed to deliver insulin with high accuracy and reliability while minimizing the risk of insulin occlusion. The EOPatch is authorized for marketing in Europe, South Korea, Indonesia and the United Arab Emirates with a compatible smartphone application that allows users to monitor and control the patch directly from their phone.

"Our goal is to simplify diabetes management and deliver the well-established benefits of automated insulin delivery to our customers in the ways they want and need," said Que Dallara, Medtronic’s executive vice president and president for diabetes business. “We look forward to expanding our offerings to participate in the patch pump market and enabling those customers access to our seamless ecosystem of support."

The company has been working on the diabetes technology sectors such as insulin pumps and continuous glucose monitors. Sales of those businesses were relatively weak, however, compared to its flagship product catheters for treatment of coronary artery disease.

South Korean medical equipment makers with strong technology competitiveness have been buyout targets of foreign companies or private equity firms.

Japan’s medical technology firm Olympus Corp. in February agreed to acquire Taewoong Medical Co., a South Korea-based manufacturer of medical devices such as gastrointestinal metallic stents, for $370 million. MBK Partners, a leading Asian private equity firm, and Unison Capital Korea took over Osstem Implant Co., the world’s fourth-largest dental implant maker.

US PE firm Bain Capital is the top shareholder of Classys Inc., a South Korean medical aesthetics technology company.

Write to Hyun-Ah Oh at 5hyun@hankyung.com
 
Jongwoo Cheon edited this article.