iQflow Acquired by US Medtronic for 971 Billion KRW

20% Premium Over Closing Price on 25th
Planned Tender Offer at 30,000 KRW per Share

Wearable Insulin Pump and CGM Integration Expected

Wearable insulin pump company iOFlow is being acquired by Medtronic, a global medical device company based in the United States.

Wearable insulin pump 'EOPatch' by EOFlow, Smart Remoten (ADM), and smartphone application 'Narsya' [Photo by EOFlow]

Medtronic announced on the 25th (local time) that it has signed the final agreement regarding the acquisition of iOFlow. The total acquisition price is 971 billion KRW (approximately 738 million USD).

For this acquisition, Medtronic plans to acquire all of iOFlow's listed shares at 30,000 KRW per share and delist iOFlow. iOFlow, listed on KOSDAQ, closed at 25,050 KRW on the day. Considering this, a premium of 19.8% was applied.

First, Medtronic will acquire all shares held by iOFlow CEO Kim Jae-jin and U.S. branch head Luis Malave at 30,000 KRW per share. As of the 8th, CEO Kim holds 18.58% (5.64 million shares) of iOFlow, and Malave exercised stock options last year to acquire 600,000 shares. For other listed shares, a public tender offer will be conducted at 30,000 KRW per share. Additionally, new shares will be issued at 24,359 KRW per share to fund iOFlow’s operations and research & development (R&D).

Que Dallara, head of Medtronic’s diabetes division, said, "Our goal is to simplify diabetes management and provide the benefits of automated insulin delivery in ways that customers want and need. We are pleased to introduce a differentiated wearable patch option to expand patient choices and drive more technology-driven innovation for those seeking easier diabetes management."

This acquisition was made based on the judgment that iOFlow’s insulin pump, the 'iO Patch,' can create synergy with Medtronic’s meal detection technology algorithm and next-generation continuous glucose monitoring (CGM). The iO Patch is the world’s second commercially available insulin pump after Insulet in the U.S. Medtronic plans to rapidly integrate its next-generation sensors and meal detection technology with the iO Patch. Through this, it aims to provide solutions across smart multiple daily injections (MDI), tethered insulin pumps, and wearable insulin patch technologies.

iOFlow CEO Kim Jae-jin stated, "I am very pleased to accelerate growth to the next stage with a partner like Medtronic, who shares the goal of simplifying diabetes management and making customers’ lives easier. We will work together to innovate wearable insulin patch technology and reach more diabetes patients worldwide."

Meanwhile, recently in the domestic medical device industry, global large medical device companies have been attempting to acquire domestic medical device firms, and rapidly growing medical device companies have been delisted. In February, Olympus acquired Taeung Medical, a specialist in gastrointestinal metal stents, for 480 billion KRW. Last year, Boston Scientific (BSX) announced plans to acquire MI Tech, a non-vascular stent manufacturer, for 291.2 billion KRW. However, the MI Tech acquisition fell through on the 17th as BSX failed to obtain merger approvals from several overseas countries and judged future approval prospects to be low. Nevertheless, BSX acquired 9.9% (3.18 million shares) of MI Tech from its major shareholder Synergy Innovation to maintain the partnership.

Additionally, next month, Osstem Implant, an implant company with a market capitalization of about 3 trillion KRW, is expected to be delisted. The private equity fund consortium MBK Partners and Unison Capital Korea (UCK) secured 96.1% of Osstem Implant’s shares through a public tender offer and resolved delisting at the board meeting. Industry insiders believe that delisting is aimed at faster decision-making and enhancing corporate value for potential resale.