Ev3 Agrees To Buy Chestnut Medical For Up To $150M

PLYMOUTH, Minn. (AP) — Medical device company ev3 Inc. said late Tuesday it agreed to buy technology company Chestnut Medical Technologies Inc. for up to $150 million in cash and stock.

Ev3 will pay $75 million upfront for Chestnut, with 30 to 40 percent of that total being paid in stock. It expects the deal for the privately held company to close within 45 days.

The price could rise to $150 million if the Food and Drug Administrations approves Chestnut's Pipeline embolization device, a product that is intended to divert blood away from a cerebral aneurysm during surgery.

A cerebral aneurysm is a weak spot in the wall of a blood vessel in the brain. The vessels swell up and can burst, which may cause stroke or death.

The milestone payment isn't expected before 2011, ev3 said. The Pipeline device is already approved in Europe. Ev3 said the deal also gives it the rights to Chestnut's Alligator Retrieval Device, which is used to remove foreign objects during surgery. Ev3 said Chestnut focuses on minimally invasive therapies in neuroradiology.

The company said it will pay for Chestnut with cash on hand, and it expects the costs of the purchase to reduce its profits in 2009 and 2010.