GTCR's acquisition of Surmodics could harm medical device market, FTC warns.

Private equity firm GTCR's planned purchase of Surmodics would harm competition in the medical device coatings market, according to the Federal Trade Commission. The FTC argues that the combination of the two manufacturers would give GTCR a significant market share, potentially leading to reduced innovation and higher prices for consumers. The trial to block the combination began on Monday.

The Federal Trade Commission (FTC) has initiated a trial to block private equity firm GTCR's planned purchase of Surmodics Inc., alleging that the combination would harm competition in the medical device coatings market [1]. The FTC contends that the merger would give GTCR a 60% share of the market, potentially stifling innovation and increasing prices for consumers.

The trial began on Monday, with FTC lawyer Maia Perez arguing that the combination of the two largest manufacturers of hydrophilic coatings—Surmodics and Biocoat—would result in a significant market concentration [1]. GTCR currently owns a majority stake in Biocoat, the second-largest player in the market.

Perez highlighted the importance of the two companies, stating that they are "the most important players" in the market. The FTC's concern is that the merger would reduce competition, which could lead to higher prices and fewer product choices for consumers [1].

GTCR's lawyer, Lawrence Buterman, disputed the FTC's claims, arguing that the agency's method of calculating market share is flawed. He contended that the FTC improperly lumps together two different technologies—thermal-cured hydrophilic coatings and UV-cured hydrophilic coatings—and ignores the existence of other coating types and no-coating options [1]. Buterman also noted that many medical device companies have the capacity to develop their own coatings, suggesting that the market is more competitive than the FTC is acknowledging.

The FTC is seeking to convince the court to halt the deal, which would give GTCR a majority stake in both Surmodics and Biocoat. GTCR has proposed to sell off some assets to Integer Holdings Corp. as a remedy, but the FTC argues that this divestiture would not address the competitive concerns [1].

The case is ongoing, and the court's decision is expected to have significant implications for the medical device coatings market. As the trial progresses, investors and financial professionals should closely monitor the developments, as the outcome could impact the competitive landscape and pricing dynamics in the industry.

References:
[1] https://www.bloomberg.com/news/articles/2025-08-21/gtcr-s-surmodics-buy-would-harm-medical-device-market-ftc-says
[2] https://seekingalpha.com/news/4488063-gtcr-purchase-of-surmodics-would-hurt-medical-device-market-ftc-says