GTCR LLC has announced a definitive agreement to acquire Surmodics, Inc. for approximately $620 million, with the deal expected to close in the second half of 2024. Under the agreement, GTCR affiliates will purchase all outstanding shares of Surmodics at a price of $43.00 per share, leading to a total equity valuation of around $627 million.

The agreement includes specific termination fees. If the merger is terminated under certain conditions, Surmodics would owe GTCR a fee of $20.38 million. Conversely, if GTCR fails to complete the merger due to regulatory issues, it would pay Surmodics a reverse termination fee of $50.17 million. In other scenarios where GTCR does not fulfill its obligations, the reverse termination fee would be $47.03 million.

The financing for the transaction will come from a mix of equity and debt. GTCR plans to raise $287.3 million through equity financing from its affiliated funds. Additionally, it has secured $450 million in debt financing from a group of lenders, including Oak Hill Advisors and Bank of Montreal, to support the merger and refinance existing debts.

Once the acquisition is finalized, Surmodics will become a privately held entity, and its shares will be delisted from The Nasdaq Stock Exchange. The transaction is contingent upon customary closing conditions, including shareholder approvals and regulatory clearances, particularly under the Hart-Scott-Rodino Antitrust Improvements Act.

Surmodics' Board of Directors has unanimously endorsed the merger and is recommending that shareholders vote in favor of the deal. Similarly, GTCR's board has also approved the transaction.

Jefferies LLC is acting as the financial advisor for Surmodics, providing a fairness opinion, while legal counsel is being provided by Faegre Drinker Biddle & Reath LLP. For GTCR, legal support comes from Kirkland & Ellis LLP and Cleary Gottlieb Steen & Hamilton LLP, with Goldman Sachs & Co. LLC serving as its financial advisor. Broadridge Corporate Issuer Solutions, Inc. will act as the transfer agent for Surmodics.