An Illinois federal judge has handed GTCR BC Holdings LLC a major win, ruling Monday that the private equity firm may move forward with its $627 million acquisition of Surmodics Inc., the nation’s top medical coatings supplier, even as the Federal Trade Commission (FTC) continues to challenge the deal on antitrust grounds.
In a ruling that could reshape the medical coatings industry, U.S. District Judge Jeffrey Cummings rejected the FTC’s request for a preliminary injunction, saying GTCR and Surmodics had adequately rebutted claims that their merger would illegally stifle competition in the outsourced hydrophilic coatings market.
GTCR’s Strategic Play: A Contested Merger
GTCR plans to merge Surmodics with Biocoat Inc., the nation’s second-largest medical coatings supplier, in which GTCR already holds a controlling stake. To offset potential antitrust concerns, the companies agreed to divest part of Biocoat’s business—including coatings, staff, brands, and equipment—to Integer Holdings Corp., a company that has twice attempted, unsuccessfully, to enter the coatings market.
A Biocoat representative celebrated the court’s decision, saying,
“This transaction will improve patient outcomes for those who rely on a wide array of medical devices. Today’s ruling is an important step toward closing the acquisition.”
Representatives for Surmodics and the FTC did not immediately respond to requests for comment.
