Medical device manufacturer CardioTech International Inc. has bought a plastics-oriented contract manufacturer, CarTika Medical Inc., for $6.6 million.
Publicly traded CardioTech of Wilmington, Mass., said Nov. 22 that it bought CarTika because it wants to beef up contract manufacturing capabilities and provide cash flow. CarTika, in Plymouth, Minn., has injection molding, thermoforming, mold making and two clean rooms in its 17,000-square-foot facility.
The company, which had sales of about $5.5 million and 50 employees, specializes in complete catheter assemblies. According to a Securities and Exchange Commission filing by publicly traded CardioTech, CarTika had net profit before taxes of $1.3 million and cash flow of $1.2 million.
``With this acquisition ... we project both increased cash flow from contract manufacturing revenues, as well as a significant enhancement in our overall manufacturing capability,'' CardioTech Chief Executive Officer Michael Szycher said in a news release.
CardioTech paid $1.6 million in stock and $5 million in cash for CarTika, the SEC filing said.
CardioTech, with annual sales of $22 million, makes cardiac products for medical device firms, but it also develops proprietary products using patented biomaterials, including polyurethanes for implantable devices.
The company is in clinical trials with an artificial PU vein that would be used in heart bypass operations, when it is too risky to take a vein from the patient's leg, said CardioTech spokesman Chris Bermudez.
CardioTech lost $368,000 in the three months ended Sept. 30.