Enovis to Acquire LimaCorporate

Enovis announced a definitive agreement to acquire LimaCorporate. The acquisition has an enterprise value of approximately €800 million, comprising a €700 million cash payment at closing and €100 million in shares of Enovis common stock (~USD $744 million and $106 million, respectively). The transaction is expected to close in early 2024.

It is the company’s ninth acquisition since 2020 and will be one of the more sizeable integrations. However, Enovis’ proven track record of successful acquisition and integration is deeply rooted in its culture. The company called M&A a “fundamental corporate capability” and pointed to the frequency of its deals as a key driver of success.

Founded in 1945, Lima is a global orthopedic company with diversified revenues that has grown at a high single-digit CAGR over the last 10 years, increasing into the low teens in the last several years. Lima’s technological solutions, including digital innovation and patient-tailored hardware, are developed to improve patient outcomes following joint replacement surgery. The company focuses on shoulder, knee and hip prostheses with a portfolio that includes one of the first modular shoulder systems in the world, the SMR, the Delta hip cup and the Physica knee.

Enovis expects Lima to generate sales of $290 million to $300 million, and $70 million to $75 million of adjusted EBITDA in 2024.

There is no change to Enovis’ previously announced 2023 full-year guidance, which contemplates organic sales growth of 7% to 7.5%, and adjusted EBITDA of $262 million to $270 million.

Benefits of the combination include:

• Establishing a ~$1 billion revenue reconstruction business with approximately 50% of revenues in the extremities markets
• Expanding international scale with a complementary global customer base and product mix
• Improving efficiency with state-of-the-art manufacturing facilities and a strong innovation engine
• Adding a complementary portfolio of surgical solutions and technologies, including 3D-printed Trabecular Titanium and a comprehensive revision offering
• Creating robust cross-selling opportunities and approximately $40 million in cost synergies to be fully realized by year three after closing through supply chain optimization and cost consolidation

“We are confident the acquisition of Lima will enable us to build on our strong growth trajectory and global leadership in orthopedic solutions to create immediate and sustainable value for our patients, customers, employees and shareholders,” said Matt Trerotola, Chair and Chief Executive Officer of Enovis. “With Lima’s complementary surgical solutions and customers, we will have the opportunity to enlarge our profitable recon portfolio and further expand our global presence. In addition, this acquisition will enable us to deliver enhanced financial results through significant cross-selling revenue growth opportunities and meaningful cost synergies.”

Specific cross-selling opportunities include selling the EMPOWR knee and AltiVate shoulder implants into Lima’s channels and Lima’s revision offerings into Mathys and Enovis US.

“Combining these two leading orthopedic businesses into one global platform creates an exciting opportunity to build on the strengths of both Enovis and Lima in developing patient-tailored devices and orthopedic products,” said Massimo Calafiore, Chief Executive Officer of Lima. “I look forward to working with the Enovis team to create even greater opportunities for growth and continued success.”

Source: Enovis; Investor Presentation; LimaCorporate