FTC Challenges Surmodics Acquisition by GTCR Over Market Dominance Concerns

The FTC is challenging GTCR's acquisition of Surmodics due to concerns over potential market dominance. Wall Street analysts predict a modest increase in Surmodics' share price over the next year, with an average target of $43.00. GuruFocus suggests a possible decrease in value, indicating a market discrepancy. Surmodics' current brokerage recommendation stands at an average of 3.0, translating to a "Hold" status.

The Federal Trade Commission (FTC) has launched a trial to block the acquisition of Surmodics Inc. by private equity firm GTCR LLC, citing potential market dominance [1]. The FTC argues that the deal would give GTCR a 60% share of the market for hydrophilic coatings, which are crucial for medical devices like catheters and guidewires.

GTCR, based in Chicago, already owns a majority stake in Biocoat Inc., the second-largest producer of these coatings. The FTC contends that combining these two companies would stifle competition, especially for life-saving technologies. The FTC's lawyer, Maia Perez, stated that Surmodics and Biocoat are the most important players in the market and that alternatives are not always available [1].

GTCR's lawyer, Lawrence Buterman, countered that the FTC's market share calculation is flawed. He argues that the two types of hydrophilic coatings—thermal-cured and UV-cured—are not interchangeable and that many medical device companies can use other coatings or none at all. Additionally, he contends that the FTC's proposed remedy of selling off some assets to Integer Holdings Corp. is insufficient [1].

Wall Street analysts have provided a mixed outlook for Surmodics. According to MarketBeat, the stock has a consensus rating of "Moderate Buy" based on 2 analyst ratings, with an average price target of $43.00 [2]. However, GuruFocus suggests a possible decrease in value, indicating a market discrepancy. Surmodics' current brokerage recommendation stands at an average of 3.0, translating to a "Hold" status [2].

The FTC trial, which began on Monday, is expected to continue in Chicago. The outcome of the trial could have significant implications for the medical device market and Surmodics' future.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-21/gtcr-s-surmodics-buy-would-harm-medical-device-market-ftc-says
[2] https://www.marketbeat.com/stocks/NASDAQ/SRDX/forecast/