CardioDynamics Completes Sale of Vermed

CardioDynamics, a San Diego-based company that uses impedance cardiography (ICG) technology to monitor the heart’s ability to deliver blood to the body, has completed the sale of its Vermed business unit for $8 million. The unit was sold to Medical Device Partners, a Vermont corporation formed by Vermed’s management team.

The decision to sell Vermed, announced in June, was based on declining margins and profits in the electrocardiogram business — Vermed supplies disposable electrodes and related supplies for electrocardiograph — and on CardioDynamics’ desire to focus exclusively on its ICG business and BioZ product line. BioZ diagnostics, modules and monitors measure blood as it enters and leaves the heart, and look at changes in impedance to calculate hemodynamic parameters. It’s a non-invasive alternative to pulmonary artery catheterization, a costly and time-consuming procedure.

In addition to continued investments in its ICG business, CardioDynamics will use proceeds from the sale to repay a $1.4 million of bank debt owed to Comerica.

“Our objective is to improve the company’s financial health in the near-term while continuing to make judicious investments in strategic areas to establish ICG in the treatment guidelines for heart failure and hypertension over the next five years,” said CEO Michael Perry in a statement. “We have identified over $10 million of potential new growth opportunities through our Phoenix Initiative. Additionally, we are carefully managing our operating expenses to continue to trend the business toward a level of positive operating cash flow.”

CardioDynamics will maintain a relationship with Vermed. The two companies forged a five-year agreement whereby Vermed will supply the ICG sensors for CardioDynamics’ BioZ products. And going forward, the two will work together to make technological improvements to current sensors.

“Within the next three to five years, we believe ICG sensors will likely comprise over 50% of revenue for the ICG business,” said Perry.

4 September 2007 | Blog, news2 | Sara Calabro | Comments