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ATS Medical receives USD20m in proceeds from private equity financing

Minneapolis-based ATS Medical, a manufacturer and marketer of cardiac surgery products and services, has closed a USD20m equity financing with Essex Woodlands Health Ventures.

Minneapolis-based ATS Medical, a manufacturer and marketer of cardiac surgery products and services, has closed a USD20m equity financing with Essex Woodlands Health Ventures.

ATS Medical has issued and sold to Essex Woodlands 8,510,639 shares of its common stock at a purchase price of USD2.35 per share, and warrants to purchase 2,533,192 shares of common stock at an exercise price of USD2.475 per share during the first year after the closing, USD2.85 per share during the second year, and USD3.10 thereafter.

Martin Sutter, co-founder and managing director at Essex Woodlands, who has joined ATS Medical’s board of directors, says: "With ATS Medical’s technological innovation, strong product portfolio and experienced management team, the company is positioned to be a leader in the cardiac surgery market. We are excited about the opportunity to invest in ATS Medical and share in its success.’

Essex Woodlands, a venture capital firm which invests exclusively in healthcare, has offices in London, New York, Palo Alto and Houston.

Michael Dale, president and chief executive officer of ATS Medical, says: "With this financing, we have significantly strengthened our balance sheet and added one of the most respected healthcare investors in the United States to our shareholder base. In addition, this financing will allow the company to settle a longstanding dispute and related litigation on terms we believe serve the best interest of shareholders. We are pleased to be eliminating the uncertainty and distraction of ongoing litigation."

ATS Medical announced today the settlement of its lawsuit with Carbomedics which began in 2007 and is related to its supply agreement with Carbomedics for certain mechanical heart valve components.

Carbomedics’ original claims against the company totalled more than USD22m. As part of the Carbomedics settlement, ATS Medical will pay USD3m to Carbomedics on 29 December 2008 and an additional USD4.5m on 30 April 2009.

Under the terms of the settlement, ATS Medical maintains all rights to manufacture, market and sell the ATS Open Pivot mechanical heart valve. Satisfaction of the settlement terms will conclude all related matters with Carbomedics and preclude any future litigation on the matter in question.

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