Trump 2.0's first antitrust case continues private equity's winning streak
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Private equity once again has prevailed over U.S. antitrust regulators, as a federal judge ruled that GTCR can proceed with its $627 million takeover of medical coatings company Surmodics.
The big picture: New administration, same result.
- This was the first antitrust case brought by Trump 2.0, which has tended to favor remedies over litigation.
- It also comes 18 months after Joe Biden's FTC tried and failed to stop a different private equity deal in the health care sector.
Catch up quick: GTCR in May 2024 announced its take-private agreement for Surmodics, the largest U.S. provider of specialized coatings for catheters and other medical devices.
- It didn't say so at the time, but GTCR planned to merge Surmodics with existing portfolio company Biocoat, which the FTC believes would give the combined entity more than a 50% market share for outsourced hydrophilic coatings.
- GTCR offered to sell select Biocoat assets, but the FTC wasn't persuaded instead chose to sue.
Driving the news: A federal judge in Chicago ruled on Monday that the proposed divestiture satisfies competition concerns, and also that the FTC's market analysis was inadequate.
- He denied the FTC's request for a preliminary injunction, although a temporary restraining order remains in effect until next Monday afternoon.
- The FTC has not yet indicated if it plans to appeal, with FTC spokesman Joe Simonson saying that the agency is "carefully reviewing the transcript of the court's opinion."
The bottom line: There has been a political push against private equity-backed consolidation in health care, and even some state-level legislation to increase oversight. So far, though, federal antitrust efforts have failed.
