A federal judge has denied the Federal Trade Commission’s request for a preliminary injunction to block private equity firm GTCR’s proposed $627 million acquisition of Surmodics, clearing the way for the private equity firm to proceed with the merger.
The case marked the first antitrust enforcement action under the current presidential administration and centered on concerns that the merger would significantly reduce competition in the market for outsourced hydrophilic coatings. The FTC, joined by the attorneys general of Illinois and Minnesota, argued that combining Surmodics with GTCR portfolio company Biocoat would create a dominant player with more than 50% market share in a segment critical to devices such as catheters and guidewires.
In its ruling, the U.S. District Court for the Northern District of Illinois determined that GTCR’s proposed divestiture of certain Biocoat assets addressed the FTC’s competition concerns, according to a Nov. 10 news release from Surmodics. The court also found the agency’s market definition and analysis inadequate to support blocking the transaction.
The ruling followed nearly 18 months of regulatory scrutiny, during which GTCR maintained that the transaction would support long-term innovation and customer value in the medical device coatings market. Surmodics, which agreed to the buyout on May 29, 2024, stood to be taken private at $43 per share — a 41.1% premium over its 30-day volume-weighted average trading price.
The transaction remains subject to a temporary restraining order in effect until 5 p.m. Central time on Nov. 17, as well as other standard closing conditions, including the absence of any legal prohibitions and satisfaction of terms outlined in the merger agreement.
If finalized, the deal would mark another setback for federal antitrust efforts targeting private equity-backed consolidation in healthcare.
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