The Federal Trade Commission has filed a lawsuit to block GTCR BC Holdings’ proposed acquisition of Surmodics, citing antitrust concerns. The FTC argues that the merger would reduce competition in the market for outsourced hydrophilic coatings, which are essential for manufacturing life-saving medical devices including catheters and guidewires. If approved, the deal would create a combined company controlling over 50 percent of this specialized market, where GTCR’s Biocoat is currently the second-largest provider and Surmodics is the largest. The FTC alleges that this merger would significantly increase market concentration, violating the 2023 Merger Guidelines, and would likely result in higher prices, lower quality, and reduced innovation, negatively affecting medical device manufacturers and patient care.
The FTC’s complaint highlights that Biocoat and Surmodics are the primary competitors in this sector, often targeting the same original equipment manufacturers and closely monitoring each other’s strategies. Their competition has led to improved coatings and cost reductions. The agency warns that no new competitors are likely to emerge to offset the loss of competition due to the specialized expertise and significant investment required to enter the market. The FTC has filed for preliminary relief in the U.S. District Court for the Northern District of Illinois to block the transaction while administrative proceedings move forward.
