FTC Challenges Medical Device Coating Transaction
Client Alerts
March 12, 2025
On March 7, 2025, the FTC filed a complaint in federal court seeking to block GTCR BC Holdings, LLC, a Chicago private equity firm, from acquiring Surmodics, Inc. The FTC alleges that Surmodics is the leading provider of a specialized “hydrophilic” coating applied to a wide range of interventional medical devices used inside the human body, such as catheters and guidewires. These devices are used to perform high-stakes neurological, cardiovascular, and peripheral vascular procedures. Hydrophilic coatings are primarily purchased by companies that design, develop, and manufacture these medical devices.
The FTC alleges that the transaction violates the Clayton Act because GTCR holds a majority stake in another leading provider of hydrophilic coatings in the United States, Biocoat, Inc. As a result, the FTC claims the acquisition “would result in a combined company that controls over 50 percent of the US market for outsourced hydrophilic coatings.” The FTC excludes in-house coating from its relevant market because even though hydrophilic coatings can be manufactured by OEMs in house, the vast majority opts to purchase hydrophilic coatings from specialized third-party manufacturers like Surmodics and Biocoat.
In addition to high market shares, the FTC alleges the acquisition would eliminate head-to-head competition between Biocoat and Surmodics, noting that these companies “target the same [OEM] customers and compete aggressively for their business.” The FTC alleges that this loss of competition would result in diminished coating quality, degradation in services offered, and reduced incentive to innovate. This lost competition would harm OEM customers and ultimately the patients who benefit from these critical inputs to lifesaving medical devices.
There are a few takeaways from the first merger challenge to be voted out of the FTC under Chair Andrew Ferguson. First, the complaint advances traditional theories of harm relating to structure of the market and lost head-to-head competition. There are no novel theories here. Second, market-definition fights will continue to be key to merger challenges. If the parties can demonstrate that the market improperly excludes in-house coating, the structure of the market and the competitive dynamics likely change dramatically. And lastly, internal documents remain key to merger review. The complaint quotes what appear to be internal documents where Biocoat describes Surmodics as the “#1 player in our space” and the “market leader.” It is vital to involve antitrust counsel early in any dealmaking process to identify relevant evidence and analyze antitrust risk.
In addition to high market shares, the FTC alleges the acquisition would eliminate head-to-head competition between Biocoat and Surmodics, noting that these companies “target the same [OEM] customers and compete aggressively for their business.” The FTC alleges that this loss of competition would result in diminished coating quality, degradation in services offered, and reduced incentive to innovate. This lost competition would harm OEM customers and ultimately the patients who benefit from these critical inputs to lifesaving medical devices.
There are a few takeaways from the first merger challenge to be voted out of the FTC under Chair Andrew Ferguson. First, the complaint advances traditional theories of harm relating to structure of the market and lost head-to-head competition. There are no novel theories here. Second, market-definition fights will continue to be key to merger challenges. If the parties can demonstrate that the market improperly excludes in-house coating, the structure of the market and the competitive dynamics likely change dramatically. And lastly, internal documents remain key to merger review. The complaint quotes what appear to be internal documents where Biocoat describes Surmodics as the “#1 player in our space” and the “market leader.” It is vital to involve antitrust counsel early in any dealmaking process to identify relevant evidence and analyze antitrust risk.
Related Capabilities
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
Client Alerts
March 12, 2025
On March 7, 2025, the FTC filed a complaint in federal court seeking to block GTCR BC Holdings, LLC, a Chicago private equity firm, from acquiring Surmodics, Inc. The FTC alleges that Surmodics is the leading provider of a specialized “hydrophilic” coating applied to a wide range of interventional medical devices used inside the human body, such as catheters and guidewires. These devices are used to perform high-stakes neurological, cardiovascular, and peripheral vascular procedures. Hydrophilic coatings are primarily purchased by companies that design, develop, and manufacture these medical devices.
The FTC alleges that the transaction violates the Clayton Act because GTCR holds a majority stake in another leading provider of hydrophilic coatings in the United States, Biocoat, Inc. As a result, the FTC claims the acquisition “would result in a combined company that controls over 50 percent of the US market for outsourced hydrophilic coatings.” The FTC excludes in-house coating from its relevant market because even though hydrophilic coatings can be manufactured by OEMs in house, the vast majority opts to purchase hydrophilic coatings from specialized third-party manufacturers like Surmodics and Biocoat.
In addition to high market shares, the FTC alleges the acquisition would eliminate head-to-head competition between Biocoat and Surmodics, noting that these companies “target the same [OEM] customers and compete aggressively for their business.” The FTC alleges that this loss of competition would result in diminished coating quality, degradation in services offered, and reduced incentive to innovate. This lost competition would harm OEM customers and ultimately the patients who benefit from these critical inputs to lifesaving medical devices.
There are a few takeaways from the first merger challenge to be voted out of the FTC under Chair Andrew Ferguson. First, the complaint advances traditional theories of harm relating to structure of the market and lost head-to-head competition. There are no novel theories here. Second, market-definition fights will continue to be key to merger challenges. If the parties can demonstrate that the market improperly excludes in-house coating, the structure of the market and the competitive dynamics likely change dramatically. And lastly, internal documents remain key to merger review. The complaint quotes what appear to be internal documents where Biocoat describes Surmodics as the “#1 player in our space” and the “market leader.” It is vital to involve antitrust counsel early in any dealmaking process to identify relevant evidence and analyze antitrust risk.
In addition to high market shares, the FTC alleges the acquisition would eliminate head-to-head competition between Biocoat and Surmodics, noting that these companies “target the same [OEM] customers and compete aggressively for their business.” The FTC alleges that this loss of competition would result in diminished coating quality, degradation in services offered, and reduced incentive to innovate. This lost competition would harm OEM customers and ultimately the patients who benefit from these critical inputs to lifesaving medical devices.
There are a few takeaways from the first merger challenge to be voted out of the FTC under Chair Andrew Ferguson. First, the complaint advances traditional theories of harm relating to structure of the market and lost head-to-head competition. There are no novel theories here. Second, market-definition fights will continue to be key to merger challenges. If the parties can demonstrate that the market improperly excludes in-house coating, the structure of the market and the competitive dynamics likely change dramatically. And lastly, internal documents remain key to merger review. The complaint quotes what appear to be internal documents where Biocoat describes Surmodics as the “#1 player in our space” and the “market leader.” It is vital to involve antitrust counsel early in any dealmaking process to identify relevant evidence and analyze antitrust risk.
Related Capabilities
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
News and Insights
Event
Amanda Shafer Berman to Speak on Energy and Administrative Law at WEN-DC Webinar
As the Supreme Court's new Term begins, Jenner & Block Partner Amanda Shafer Berman will join a Women's Energy Network of Washington, DC (WEN-DC) webinar on how the Court's decisions are shaping the energy sector.
October 14, 2026
Publications
Partner Amanda Shafer Berman Quoted in Bloomberg Law on Senate Permitting Overhaul Bill
Partner Amanda Shafer Berman was quoted in an October 5 Bloomberg Law article, "Permitting Deal Gives Projects Defense Against Litigation Delays," on the Senate's new permitting overhaul package and its expected impact on litigation over federal permitting reversals.
October 2026
Event
Partner John Storino to Speak at Sandpiper Partners' “AI and Outside Counsel Guidelines Roundtable”
On October 8, Partner John Storino will serve as a panelist at the “AI and Outside Counsel Guidelines Roundtable,” hosted by Sandpiper Partners in Chicago.
October 8, 2026
Event
Partner Meghan Greenfield to Speak on Supreme Court Climate Case at Edison Electric Institute's Fall Legal Conference
On Wednesday, October 7, Partner Meghan Greenfield will speak on a panel titled "Boulder County v. Suncor Energy: What the Supreme Court's Climate Case Means for the Energy Industry" at the Edison Electric Institute's Fall Legal Conference in Salt Lake City, Utah.
October 7, 2026
Publications
The Form Rules Everything: A Seventh Circuit Ruling on ERISA's Substantial Compliance Doctrine
Partner Joseph Torres and Special Counsel Jennifer Beach authored an article for Employee Relations Law Journal examining the Seventh Circuit's decision in Packaging Corp. of America Thrift Plan for Hourly Employees v. Langdon, a ruling that addresses both the standard of review in ERISA interpleader actions and the continued viability of the substantial compliance doctrine for changing plan beneficiaries.
October 5, 2026