Medtronic’s (NYSE:MDT) surgical technologies segment received a boost as the U.S. Food and Drug Administration approved the Aquamantys 3 System, a tool made possible by the company’s acquisition of Salient Surgical Solutions earlier this year.
Aquamantys uses radiofrequency energy and saline to reduce blood loss and stop bleeding during surgery. It also includes a tool that allows surgeons to cut while also stopping blood loss. Medtronic acquired the technology when it completed the acquisition of Salient, which Medtronic had already invested in, for $480 million.
There’s good reason for Medtronic to grow its surgical revenue. The company’s surgical technologies revenue accounted for about 10 percent of all revenue in fiscal year 2011. In the fiscal fourth quarter, the revenue from the segment grew 7 percent to $298 million. After adjusting for the divestiture of its ophthalmic business in fiscal year 2010, the growth was 9 percent.
Before the acquisition, Salient itself was annualizing revenue at $100 million and, in Medtronic’s words, had shown consistent high growth. At the same time it acquired Salient, Medtronic also purchased Peak Surgical.