NVCN - Neovasc soars ~30% as Shockwave set to acquire it in ~$100M deal

Shockwave Medical ( NASDAQ: SWAV ) is acquiring Neovasc ( NASDAQ: NVCN ) for an enterprise value of ~$100M plus certain contingent payments.

Canada-based medical device maker Neovasc is developing a minimally invasive treatment for refractory angina —  a type of chest pain caused due to reduced blood flow to the heart.

Under the agreement , Shockwave will acquire all outstanding Neovasc shares for an upfront cash payment of $27.25 per share, which comes to an enterprise value of ~$100M, inclusive of certain deal-related costs.

Neovasc shareholders will also receive a potential deferred payment in the form of a non-tradable contingent value right (CVR) to receive up to an additional $12 per share in cash if certain regulatory milestones are achieved.

The deferred payments linked to the CVR are up to ~$47M, upon final FDA premarket approval to sell Neovasc Reducer in the U.S. to treat angina (the Milestone), according to Neovasc.

"We believe the Reducer is an excellent fit for Shockwave as it enables us to apply our capabilities to address another large, unmet need within cardiology – refractory angina," said Shockwave President and CEO Doug Godshall.

The agreement includes a termination fee of $3.824M, which Neovasc may have to pay under certain circumstances, including if the deal is terminated if Neovasc accepts a superior proposal.

The directors and senior officers of Neovasc and Strul Medical Group, owning a total ~9.23% of voting securities, have greed to vote in favour of the transaction.

Strul has also agreed, among other things, to convert into common shares at $25, a restated senior secured convertible note issued by Neovasc, with an initial principal amount of $13M, just prior to the effective time of the transaction.

The deal will be implemented by way of a court-approved plan of arrangement and will require approval of at least 2/3% of the votes cast by Neovasc stockholders.

The transaction, which is also subject to court approval and other conditions, is expected to be completed in H1 2023.

NVCN +32.27% to $28.49 premarket Jan. 17

SWAV -7.43% to $186.90 premarket

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