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Globus Medical announced that it would acquire NuVasive via an all-stock transaction valued at $3.1 billion. The move combines the No. 7 and No. 8 players by revenue in the orthopedic industry, and has implications to significantly transform the spine market.
The transaction is expected to close in mid-2023.
Agreement Terms
NuVasive shareholders will receive 0.75 of a share of Globus Medical stock. The implied share price for NuVasive would be $57.72, an equity value of $3.1 billion.
NuVasive shareholders will own approximately 28% of the combined company, and Globus Medical shareholders will own about 72% once the transaction completes.
Leadership
Globus Medical’s executive team will lead the new company.
David Paul, Globus Medical’s Board of Directors Chairman; Dan Scavilla, CEO of Globus Medical and Keith Pfeil, CFO of Globus Medical, will all maintain their roles. Chris Barry, CEO of NuVasive, will support the integration planning of the combined company.
Strategic Benefits
The companies noted that the transaction accelerates each entity’s globalization strategy to target the spine, orthopedics, enabling technology, power tools and biologics markets. The most significant implications will come in the $10 billion spine market, where Globus and NuVasive are peers. The combined company will catapult them from the third and fourth spots — with each around $850 million in revenue — to a firm second place behind Medtronic.
Company executives are excited about adding NuVasive Specialty Orthopedics to Globus’ growing trauma team.
The deal primarily focuses on spine, so Globus Medical’s development of joint replacement robotics and implants is unchanged. However, the companies have yet to determine how the Pulse platform fits with the overall enabling technology portfolio.
In addition to a larger surgeon base and expanded geographic coverage, the combined companies bring operational synergies. Globus gains access to NuVasive’s global distribution center in Memphis, Tennessee, and West Carrollton, Ohio, manufacturing plant. The company said that there are opportunities to increase in-sourcing for NuVasive implants.
Looking Ahead
Globus CEO Mr. Scavilla pushed back on the notion that the combined company would be big, slow and on the defense to maintain such a high market share.
Despite the slow-growing nature of the core spine market, the combined company is well-positioned in faster-growing sub-segments. It also has designs to expand into regenerative medicine, sports medicine and extremities.
For 2023, both companies expect high-single-digit sales growth on a constant currency basis.
This is a developing story.
Globus Medical announced that it would acquire NuVasive via an all-stock transaction valued at $3.1 billion. The move combines the No. 7 and No. 8 players by revenue in the orthopedic industry, and has implications to significantly transform the spine market.
The transaction is expected to close in mid-2023.
Agreement Terms
NuVasive...
Globus Medical announced that it would acquire NuVasive via an all-stock transaction valued at $3.1 billion. The move combines the No. 7 and No. 8 players by revenue in the orthopedic industry, and has implications to significantly transform the spine market.
The transaction is expected to close in mid-2023.
Agreement Terms
NuVasive shareholders will receive 0.75 of a share of Globus Medical stock. The implied share price for NuVasive would be $57.72, an equity value of $3.1 billion.
NuVasive shareholders will own approximately 28% of the combined company, and Globus Medical shareholders will own about 72% once the transaction completes.
Leadership
Globus Medical’s executive team will lead the new company.
David Paul, Globus Medical’s Board of Directors Chairman; Dan Scavilla, CEO of Globus Medical and Keith Pfeil, CFO of Globus Medical, will all maintain their roles. Chris Barry, CEO of NuVasive, will support the integration planning of the combined company.
Strategic Benefits
The companies noted that the transaction accelerates each entity’s globalization strategy to target the spine, orthopedics, enabling technology, power tools and biologics markets. The most significant implications will come in the $10 billion spine market, where Globus and NuVasive are peers. The combined company will catapult them from the third and fourth spots — with each around $850 million in revenue — to a firm second place behind Medtronic.
Company executives are excited about adding NuVasive Specialty Orthopedics to Globus’ growing trauma team.
The deal primarily focuses on spine, so Globus Medical’s development of joint replacement robotics and implants is unchanged. However, the companies have yet to determine how the Pulse platform fits with the overall enabling technology portfolio.
In addition to a larger surgeon base and expanded geographic coverage, the combined companies bring operational synergies. Globus gains access to NuVasive’s global distribution center in Memphis, Tennessee, and West Carrollton, Ohio, manufacturing plant. The company said that there are opportunities to increase in-sourcing for NuVasive implants.
Looking Ahead
Globus CEO Mr. Scavilla pushed back on the notion that the combined company would be big, slow and on the defense to maintain such a high market share.
Despite the slow-growing nature of the core spine market, the combined company is well-positioned in faster-growing sub-segments. It also has designs to expand into regenerative medicine, sports medicine and extremities.
For 2023, both companies expect high-single-digit sales growth on a constant currency basis.
This is a developing story.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
