Austin medical company makes $115 million acquisition

Oct 30, 2013
Austin American Statesman

Austin medical device maker Apollo Endosurgery will pay up to $115 million to buy Allergan’s Lap-Band gastric bypass business

Under the deal, Apollo will give Allergan an upfront payment of $75 million in cash plus a $15 million stake in the company in return for rights to the device, which is a stomach-restricting band used to treat obesity

In addition, based on various business milestones, Apollo will make payments of up to $20 million to the California-based cosmetic drug and device maker

Founded in 2006, Apollo makes surgical devices that fit onto standard flexible endoscopes, allowing surgeons to cut and sew tissue from inside the gastrointestinal tract, instead of having to cut through the skin to access a surgery site

Dennis McWilliams, CEO of Apollo, said the acquisition of Lap-Band and Orbera technologies provides Apollo with a strong revenue stream and a global sales channel for its surgical devices

The deal grows Apollo’s annual revenue from less than $10 million to more than $100 million, he said

Apollo has 50 employees, including 30 at its headquarters on South Capital of Texas Highway. The company is hiring in all areas, including sales, marketing, finance and engineering

Apollo was incubated by PTV Sciences, an Austin-based venture capital firm specializing in medical technology, and was initially funded through a seed grant from the University of Texas Medical Branch at Galveston

The company funded the Allergan deal through new equity and debt financing. Apollo previously raised about $70 million from investors including PTV Sciences

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