Merit Medical Expands GI Portfolio With $22M C2 CryoBalloon Acquisition

Merit Medical Systems MMSI announced that it has signed a definitive agreement to acquire the C2 CryoBalloon technology from Pentax of America, a subsidiary of PENTAX Medical, Inc. The innovative cryoablation device, designed for the treatment of Barrett’s esophagus and other gastrointestinal disorders, will be integrated into Merit Medical’s Endoscopy portfolio. With gastrointestinal diseases increasingly linked to chronic conditions such as gastroesophageal reflux disease (GERD), the acquisition aligns with broader healthcare trends toward minimally invasive treatment options.

The C2 CryoBalloon delivers controlled freezing to ablate abnormal tissue while preserving surrounding structures, offering precision in treating Barrett’s esophagus and gastric antral vascular ectasia syndrome. This addition gives Merit Medical a differentiated tool in the high-growth GI market, complementing its existing endoscopy offerings and strengthening its competitive positioning. By bringing manufacturing in-house to its Utah facility and absorbing key Pentax employees, Merit Medical will also secure greater control over production and accelerate technology integration.

Likely Stock Performance

Shares of Merit Medical have lost 16.8% so far this year compared with the industry's 1.9% decline. The S&P 500 Index has increased 14% in the same time frame.

MMSI’s stock performance may see short-term pressure due to projected earnings dilution in 2025 and 2026, reflecting the integration costs of the C2 CryoBalloon acquisition. However, investors could view the deal favorably as a strategic move into a high-growth gastroenterology segment. With revenue contributions expected to ramp up in 2026 and beyond, sentiment may gradually shift toward optimism, supporting long-term valuation gains once the benefits of portfolio expansion become more visible.

Financial Impact and Growth Outlook

Per the deal, Merit Medical will pay a total purchase price of $22 million, which includes an upfront $19 million cash payment and up to $3 million in milestone-based contingent payments. While the transaction will initially pressure earnings, contributing to earnings dilution of 1 cent in 2025 and 2-3 cents in 2026, management expects long-term accretion.

Revenue contribution will remain modest in the near term, at about $1 million in late 2025, before increasing to $6-$8 million in 2026. Notably, the asset provides Merit Medical with an entry point into a multibillion-dollar gastroenterology market, offering significant growth potential beyond the immediate financial impact.

Long-Term Strategic Implications

Per the Grand View Research report, the global market for gastroesophageal reflux disease treatments reached an estimated value of $5.11 billion in 2024, with expectations to witness a CAGR of 2% through 2030. Increasing GERD cases are partly driven by evolving lifestyle factors such as urban living patterns and changing eating behaviors.

Although the acquisition will weigh on near-term earnings, the deal signals a longer-term growth play. With GERD prevalence increasing globally, leading to complications such as Barrett’s esophagus and cancer, demand for effective and less invasive interventions is expected to rise. By securing C2 CryoBalloon, Merit Medical is positioning itself as a more significant player in upper GI interventions, which could lead to deeper commercial penetration and broader product synergies.

Merit Medical’s acquisition of the C2 CryoBalloon is less about short-term earnings and more about strengthening its presence in a strategically important therapeutic area. Despite near-term dilution, the deal broadens the company’s technology base, diversifies its revenue streams, and enhances its long-term growth trajectory in gastroenterology.

Merit Medical Systems, Inc. Price

Merit Medical Systems, Inc. price | Merit Medical Systems, Inc. Quote

Zacks Rank & Other Key Picks

Merit Medical currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the broader medical space are Masimo MASI, DarioHealth DRIO and ENDRA Life Sciences NDRA, each presently carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masimo shares have lost 10.1% so far this year compared with the industry’s 9.7% decline. Estimates for the company’s 2025 earnings per share have increased 1.3% to $5.30 in the past 30 days.

MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 13.8%. In the last reported quarter, it posted an earnings surprise of 8.1%.

Estimates for DarioHealth’s 2025 loss per share have narrowed 9% to $9.83 in the past 60 days. Shares of the company have lost 14.2% so far this year compared with the industry’s 9.7% decline.

DRIO’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 34.81%. In the last reported quarter, it delivered a negative earnings surprise of 9.09%.

Estimates for ENDRA Life Sciences 2025 loss per share have narrowed 22.1% to $7.48 in the past 60 days. Shares of the company have gained 18.4% so far this year against the industry’s 9.7% decline.

NDRA’s earnings beat estimates in three of the trailing four quarters and missed once, the average surprise being 4.94%. In the last reported quarter, it delivered an earnings surprise of 24.67%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research