SAINT PAUL — Minnesota Attorney General Keith Ellison announced last week that he is joining forces with Illinois Attorney General Kwame Raoul and the Federal Trade Commission (FTC) to block the proposed acquisition of Minnesota-based Surmodics, Inc. by private-equity firm GTCR BC Holdings, LLC. The lawsuit, filed in U.S. District Court for the Northern District of Illinois, challenges the merger under the federal and state antitrust laws, citing threats to competition, innovation, and affordability in the medical-device industry.
Surmodics, headquartered in Eden Prairie, is the nation’s largest provider of outsourced hydrophilic coatings—specialized medical coatings that help doctors safely maneuver devices like catheters and guidewires during life-saving procedures. GTCR, based in Illinois, already holds a majority stake in Biocoat, Inc., the second-largest player in the same space.
The FTC initially filed a complaint on March 6, 2025, asserting that the merger would give the combined entity control over more than 50% of the market, effectively ending the critical head-to-head competition between Surmodics and Biocoat. That competition, regulators argue, has driven lower prices, better quality, and innovation in the development of hydrophilic coatings.
Attorney General Ellison echoed those concerns:
“Fair competition on a level playing field is essential to keeping our economy healthy — and fair competition in the medical-device sector is essential to keeping people healthy,” Ellison said. “This merger threatens to harm patients and companies across the medical-device industry by disrupting competition, particularly in Minnesota, which leads to higher prices, less innovation, and greater risk. Today, my office is putting Minnesota’s patients and medical-device manufacturers and innovators first by suing to stop this unlawful acquisition.”
Implications for “Medical Alley”
Minnesota, often referred to as “Medical Alley,” is a global hub for medical innovation and device manufacturing. Surmodics is one of many companies in the state supporting a vibrant ecosystem that relies on open market competition to foster breakthroughs and keep patient care affordable. Ellison’s office emphasized that the proposed acquisition poses a direct threat to the state’s economic and public health interests.
“The proposed acquisition of Surmodics by a private equity firm represents a troubling trend of wealthy investors attempting to limit competition and innovation in a market while extracting advantages that come from eliminating competitors,” Illinois Attorney General Raoul said. “If approved, this acquisition would increase prices for Illinois residents by putting profits before people. I will continue to work to increase options for consumers and rein in anticompetitive behavior wherever it occurs.”
A Market on the Brink
According to the amended complaint, Surmodics and Biocoat closely monitor and compete for the same original equipment manufacturers (OEMs)—from startups to multinational firms. Their rivalry has led to advances in coating quality, customer service, and pricing. Allowing GTCR to consolidate the two under one roof, the lawsuit claims, would eliminate those benefits and lead to a dangerously concentrated market.
The FTC, Ellison, and Raoul argue that no new competitor is likely to emerge to challenge the merged entity, as developing hydrophilic coatings requires years of expertise and significant financial investment. The merger, they assert, violates the 2023 Merger Guidelines set forth by the FTC and the U.S. Department of Justice.
What’s Next
The joint legal action seeks a preliminary injunction to block the transaction while the matter is reviewed through an administrative proceeding. A redacted version of the amended complaint is available on Attorney General Ellison’s website, with the full version filed under seal.
Minnesota consumers and businesses who have concerns about anti-competitive practices are encouraged to contact the Attorney General’s Office via the Antitrust Report Form or call:
- (651) 296-3353 (Metro area)
- (800) 657-3787 (Greater Minnesota)
- (800) 627-3529 (Minnesota Relay)
As the legal battle begins, the outcome could have ripple effects across the national med-tech industry—and particularly within Minnesota’s thriving innovation landscape.
