LONDON, Sept. 29, 2020
LONDON, Sept. 29, 2020 /PRNewswire/ -- Smith+Nephew (LSE:SN, NYSE:SNN), the global medical technology business, announces that it has agreed to acquire the Extremity Orthopaedics business of Integra LifeSciences Holdings Corporation (NASDAQ:IART) for $240 million. The acquisition supports Smith+Nephew's strategy to invest in higher-growth segments.
This acquisition will significantly strengthen Smith+Nephew's extremities business by adding a combination of a focused sales channel, complementary shoulder replacement and upper and lower extremities portfolio, and an exciting new product pipeline.
The focused extremities commercial channel includes a specialised sales force and distributors, predominantly in the US as well as Canada and Europe.
The portfolio is highly complementary to Smith+Nephew's existing orthopaedics offering, in particular providing entry into the shoulder replacement and foot and ankle segments. The full portfolio includes devices, implants, and instruments which provide for shoulder replacement as well as reconstruction of bone in the hand, wrist and elbow (Upper Extremity) and foot and ankle (Lower Extremity). The US extremities segment has been growing at around 6-7% per annum1.
The Extremity Orthopaedics R&D pipeline includes a next-generation shoulder replacement system, which is expected to be ready for full commercial launch in 2022.
Skip Kiil, President, Global Orthopaedics at Smith+Nephew, said:
"Integra's Extremity Orthopaedics business is an established global player in the rapidly growing extremities segment, including total shoulder replacement, and has a well-regarded specialised sales channel and a strong pipeline of new products. This strategic acquisition represents a significant opportunity to strengthen Smith+Nephew's position in a high-value area and allows us to offer a leading extremities portfolio to customers."
Peter Ligotti, Senior Vice President, Extremity Orthopaedics, Integra LifeSciences, said:
"We are looking forward to joining an organisation that is committed to growing and expanding its orthopaedic product portfolio. We are excited for the opportunities ahead as we continue to advance orthopaedic innovations for our customers and improve patient outcomes."
The business operates from facilities in Austin, Texas, which includes a surgeon training facility, as well as in Lyon, France. It is expected that around 300 employees will join Smith+Nephew on completion.
The value of the transaction is $240 million which will be financed from existing cash and debt facilities.
The business generated revenue of $90 million in 2019 and traded at a small loss. The business is expected to deliver double-digit revenue growth and be slightly dilutive to trading profit in 2021 and 2022. The Return on Invested Capital (ROIC) is expected to meet or exceed our Weighted Average Cost of Capital (WACC) by the fifth year.
The acquisition is expected to complete around the end of 2020, subject to the satisfaction of customary conditions including consultation with employee representative bodies.
1 Data from SmartTrak
Smith+Nephew is a portfolio medical technology business that exists to restore people's bodies and their self-belief by using technology to take the limits off living. We call this purpose 'Life Unlimited'. Our 17,500+ employees deliver this mission every day, making a difference to patients' lives through the excellence of our product portfolio, and the invention and application of new technologies across our three global franchises of Orthopaedics, Advanced Wound Management and Sports Medicine & ENT. Founded in Hull, UK, in 1856, we now operate in more than 100 countries, and generated annual sales of $5.1 billion in 2019. Smith+Nephew is a constituent of the FTSE100 (LSE:SN, NYSE:SNN). The terms 'Group' and 'Smith+Nephew' are used to refer to Smith & Nephew plc and its consolidated subsidiaries, unless the context requires otherwise.
Integra LifeSciences is a global leader in regenerative technologies, neurosurgical and extremity orthopedic solutions dedicated to limiting uncertainty for clinicians, so they can focus on providing the best patient care. Integra offers a comprehensive portfolio of high quality, leadership brands that include AmnioExcel®, Bactiseal®, Cadence®, Certas®, Codman®, CUSA®, DuraGen®, DuraSeal®, ICP Express®, Integra®, MediHoney®, MicroFrance®, PriMatrix®, Salto Talaris®, SurgiMend®, TCC-EZ®, Titan™ and VersaTru®. For the latest news and information about Integra and its products, please visit www.integralife.com.
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