Merck, spinoff Organon paying $240M for maternal health-focused device maker

Merck announced Tuesday that it has agreed to acquire a maternity-focused medical device company for up to $240 million on behalf of Organon, the company spinning off from the Kenilworth-based drugmaker.

Jersey City-based Organon, a women’s health care company, will acquire Alydia Health after Organon’s spinoff into a standalone public company, Merck said in a news release. The spinoff is currently estimated to take place in the second quarter, and the transaction is expected to close after that point.

“The acquisition aligns with Organon’s strategy to become a global leader in women’s health by focusing our product development on her unmet medical needs,” Kevin Ali, Organon’s CEO, said in a prepared statement. “We believe that Organon’s strong global commercial footprint in reproductive health, in conjunction with Alydia’s rapidly growing commercial capabilities in the U.S., will help enable growth of the Jada System, including potential expansion into Europe and other developed countries, as well as in the world’s least-developed markets, where Organon has significant experience creating affordable access.”

The purchase price includes $215 million upfront, plus a $25 million milestone payment, subject to customary price adjustments. Merck will pay $50 million prior to the spinoff, and the remaining $165 million will be paid by Organon at close, with the company paying the milestone payment upon achievement.

Alydia focuses on preventing maternal morbidity and mortality caused by postpartum hemorrhage or abnormal postpartum uterine bleeding. Its Jada System is intended to provide control and treatment of such bleeding or hemorrhage when conservative management is warranted.

The transaction is subject to customary approvals and conditions.

Guggenheim Securities served as Alydia’s financial adviser.