Illinois and Minnesota join FTC lawsuit to halt $627M Surmodics acquisition
The Federal Trade Commission (FTC) has filed a legal challenge against the $627 million private equity takeover of Surmodics by GTCR, with Illinois and Minnesota joining the lawsuit as co-plaintiffs. The FTC alleges that the acquisition would create a company controlling over 50% of the market for outsourced hydrophilic coatings, raising antitrust concerns.
The FTC's complaint, filed in March, argues that the merger between Surmodics and the private equity firm would be anticompetitive because it combines the two largest manufacturers in this market sector. The FTC views this deal as potentially reducing competition and increasing costs for vital medical technology inputs.
Illinois Attorney General Kwame Raoul has expressed concern that if the acquisition is approved, it would increase prices for Illinois residents by putting profits before people. Raoul stated that the proposed acquisition is a troubling trend of wealthy investors attempting to limit competition and innovation in a market while extracting advantages that come from eliminating competitors.
Surmodics, a company that provides outsourced hydrophilic coatings for devices, accepted the takeover offer in May 2024. However, the company has not commented publicly on the FTC's actions since the federal agency filed the original complaint. At the time, Surmodics said it "respectfully disagrees with the FTC's decision" and remains committed to completing the merger, which it called "pro-competitive."
The private equity firm that is attempting to acquire Surmodics owns a majority stake in another coatings company, Biocoat. Together, Surmodics and Biocoat are the number one and two players, respectively, in the market for outsourced hydrophilic coatings, accounting for more than 50% of the sector.
The current status of the FTC's legal challenge against GTCR's takeover of Surmodics is pending as of July 1, 2025. GTCR has responded by filing an answer to the amended complaint. Illinois and Minnesota have joined the FTC's complaint for a preliminary injunction to stop the takeover. The FTC's requests for information have delayed the closing of the deal, which was originally scheduled for last year.
This case reflects ongoing regulatory efforts to prevent consolidation that could reduce competition and increase costs for vital medical technology inputs. The FTC, Illinois, and Minnesota aim to protect competition in the healthcare markets of their respective states. The final outcome of this legal challenge could have significant implications for the outsourced hydrophilic coatings market.
- The FTC, Illinois, and Minnesota aim to protect innovation within the healthcare industry by contesting the acquisition of Surmodics by GTCR.
- The potentially anticompetitive merger between Surmodics and the private equity firm, if approved, could lead to increased costs for essential medical technology devices.
- AI-driven analytics provide crucial data to assess the potential impacts of mergers and acquisitions (M&A) on the medical technology (medtech) industry, such as the FTC's ongoing challenge against the acquisition of Surmodics.
- News outlets closely monitor the progress of the lawsuit, as its outcome may shape future business strategies and investments in the outsourced hydrophilic coatings market.
- The financial implications of the legal challenge on the broader industry could be substantial, as the FTC's concern over reduced competition may serve as a deterrent for similar consolidations in the medtech space.
