Medtronic said it has entered into definitive agreements to acquire EOFlow, a Korean company specializing in wearable insulin pumps, and announced its intention to delist the company from the tech-heavy Kosdaq market.
Under the definitive agreements, Medtronic will acquire all of the shares held by the EOFlow CEO Kim Jae-jin and EOFlow Inc., the company's U.S. subsidiary, President Luis Malave, for 30,000 won ($22.57) per share.
In addition, under a stock subscription agreement (SSA) with EOFlow, Medtronic will purchase new shares at a price of 24,359 won per share to fund EOFlow's ongoing operations and R&D.
Medtronic ultimately plans to delist the EOFlow from Kosdaq as the company said it would purchase all of the outstanding shares of EOFlow through a tender offer at a price of 30,000 won per share.
The tender offer will continue until Medtronic holds a majority of EOFlow's shares on a fully diluted basis, when adding the number of shares to be acquired upon the closing of the Stock Purchase Agreement and the Warrant Agreement, which are expected to occur concurrently.
Through the transaction, Medtronic intends to purchase all of the outstanding shares of EOFlow to undergo the delisting process.
Medtronic expects it will cost approximately 97.1 billion won to acquire a 100 percent stake in the company through the tender offer, and aims to complete the acquisition by the second half of 2023."
"Our goal is to facilitate diabetes management and deliver the benefits of systems that auto-inject insulin in the way patients prefer," said Que Dallara, EVP and President of Medtronic Diabetes. "With the introduction of EOFlow's differentiated wearable patchable device, we are excited to expand the choices for people with diabetes and drive further innovation for those who want to manage their diabetes more easily."
As Medtronic expands its offerings into the patchable pump market, it looks forward to welcoming people with diabetes who have been using insulin pumps to experience Medtronic's integrated support ecosystem, Dallara added.
EOFlow CEO Kim also said, "We couldn't be more excited to accelerate our growth with Medtronic, a company that shares our goal of improving the lives of people with diabetes by making diabetes management easier."
With Medtronic, the company will continue to innovate wearable insulin patch technology to reach more people with diabetes around the world, it added.
With the acquisition of EOFlow, Medtronic expects it will be able to offer insulin pumps that use its meal detection technology algorithms on top of its next-generation continuous glucose monitors to meet the needs of more people with diabetes without limiting their treatment journey and preferred insulin delivery method.
The Medtronic Meal Detection Technology algorithm is a clinically proven system that detects meal size and automatically adjusts insulin doses and is currently available on Medtronic's MiniMed 780G.
Following the closing of the transaction, Medtronic will expedite the integration of the Medtronic Meal Detection Technology algorithm into EOPatch.