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Over the last half-decade, Enovis has evolved into one of the most exciting companies in orthopedics. Its aggressive M&A strategy and entrepreneurial culture have Enovis on the cusp of $1 billion in annual reconstructive sales. For context, joint replacement made up just 22% of total company sales in 2019. It climbed to 34% by the end of 2022, and we estimate it will comprise nearly half of Enovis’ sales in 2024.
How is Enovis winning at such a high rate? We had an opportunity to ask Enovis CEO Matt Trerotola about the company’s M&A integration process, the expanding importance of enabling technologies and its strategy in the foot and ankle market. Excerpts from our conversation are below, edited for clarity and length.
We know M&A is a strength of Enovis, but have there been any lessons learned during recent integrations?
Matt Trerotola: You’re right. M&A is a core competence for us, going back to our Danaher and Colfax roots. We’ve got a seasoned and disciplined deal team, EGX tools and a great process for integration, planning and execution. We have a very successful track record with over 20 acquisitions in the medtech space in the past five years. We’ve also shown that we can do great deals in ortho and execute them successfully, building our foot and ankle business, globalizing recon and acquiring some key enabling tech for our recon business.
One of the key lessons from our foot and ankle acquisitions was the importance of integrating and aligning the channels fast and with discipline. We’ve been applying this on the Lima acquisition, and really have had great success. We planned to do the channel acquisition quickly and with discipline this year, so that we could put it behind us and have great momentum going forward. And that’s what we’ve done; we’re poised to step into 2025 with tremendous momentum.
How much have you been able to synergize between different products and geographies that recently came into the fold?
Matt Trerotola: That’s part of the strategic driver for these acquisitions. The power of Enovis as an owner has had positive growth impact on Mathys and then Lima more recently. The customers can see the great potential of having a strong global owner like Enovis. Then, beyond that initial boost, the cross-selling starts to kick in. I’ll highlight a few examples.
Mathys had a great anatomic shoulder footprint, but not a very good reverse offering. Now Mathys can sell into its legacy channel two great reverse shoulder systems, the AltiVate and the PRIMA, and also the SMR convertible system that came with Lima acquisition.
Lima was historically strong in knee, not as strong as in hip. Mathys was historically strong in hip, not as strong in knee. So, they’ve had immediate local cross-selling opportunities, and now we’re starting to also bring our great EMPOWR knee into key markets around the world to complement that combined offering. Lima has been very strong and complex revisions and both Enovis and the legacy Mathys channel have benefited from that great revision capability being brought in.
Finally, as we’re working toward approvals outside the U.S. for our ARVIS technology, there’s a lot of excitement within the legacy Lima and Mathys channels about that technology. Given the space and cost pressure in many countries around the world, there’s a lot of excitement about enabling tech in general, but also a lot of excitement about ARVIS’ smaller footprint, smaller cost profile and great technology benefits.
So, it’s early days in terms of financial impact from cross-selling, but as we move into 2025 this will start to become an important part of how we drive above-market growth around the world. Cross-selling is just a start. We have a clear integrated roadmap to drive to stronger and deeper positions in all anatomies over the next three to five years, to sustain that well above-market growth over time.
What’s the main way you’re measuring success for ARVIS? How do you envision that technology evolving over time?
Matt Trerotola: We’re convinced that enabling tech is a big deal. It will be a core dimension of competition, not just as it is today in knees, but over time it’ll be a core dimension of competition in the other anatomies, particularly shoulder.
We’re also convinced that planning and navigation will be the foundation of that in shoulder. If you have great navigation, then you can decide how much automation is valuable for positioning for the cuts or drilling. What’s going to make a difference but add little cost and time into the procedure?
In knees, we’ve been focused on getting ARVIS completely out there in the marketplace, getting tremendous feedback so that we can get this new technology to a place where it can have a strong ramp into the marketplace. We’re excited about where we are. We have some key additional applications coming that are going to accelerate that ramp in 2025.
At the same time, we’re super excited that we’ve gotten ARVIS launched into shoulder. It’s early days in shoulder. We’re just getting some great surgeon feedback. We’re going to be able to act on that quicker in shoulder based on the benefits of the time that we’ve spent developing the product in knee. We’re very excited to have that strong foundation of planning in shoulder through our tremendous MatchPoint planning and now guidance in shoulder through ARVIS.
Foot and ankle is much more competitive now than it has been in recent years. What’s the key to Enovis differentiating itself in that market?
Matt Trerotola: We’ve built a great foot and ankle business that’s got a winning strategy. It’s on a great growth path. We feel confident that we’ve outperformed most players in the space for a couple years now, and we’ve got great momentum. There are three ways we’re focused on differentiating our strategy in that business.
The first is that we have launched some truly differentiated technologies for high value, high patient outcome procedures. The DynaNail family is a great example. It leverages our proprietary NiTiNOL technology. It creates a step change in outcomes for a range of fracture cases. It’s that kind of big, differentiated technology that makes a surgeon want to want to convert and a channel partner want to be our partner.
MIS technologies and bunion is another part of the strategy. Bunion is a huge, growing segment. We’ve got a full range of offerings. We lead with MIS because it provides significant patient benefits, including reduced incision and healing time, but still gets into a great outcome for a portion of indications. Then we wrap around it the rest of our great offering for the full range of bunion indications.
The third part of the strategy is a very strong, aligned channel. More than 60% of our channel is now dedicated to our products, and that number goes up every quarter. We know from the other parts of recon where we participate, that if you can have that strong aligned channel that is investing alongside of you, and you keep feeding great technologies, you can outperform the market for a long time.
What unique challenges and opportunities does Enovis face as a $2 billion company? What’s the main thing you’re focusing on as the business scales up?
Matt Trerotola: Fortunately, there are a lot more opportunities and challenges. You know, we can invest more in the most important innovation priorities. We’ve got more scale and leverage in our supply chain and our commercial contracting. We can attract even more great talent, more great channel partners and tremendous industry-leading KOLs. We’ve almost doubled in the last five years, and I think that gives us more opportunities and more optionality as a company.
I think the key challenge for us is to make sure that we don’t get big and slow. We pride ourselves on the fact that we are agile. We have a great market mix so that we can grow faster than our larger competitors. We tend to make sure that our culture stays entrepreneurial and agile, and then we make the right choices about market participation and organization structure over time to sustain that faster growth profile as we continue to get larger and more scale.
Over the last half-decade, Enovis has evolved into one of the most exciting companies in orthopedics. Its aggressive M&A strategy and entrepreneurial culture have Enovis on the cusp of $1 billion in annual reconstructive sales. For context, joint replacement made up just 22% of total company sales in 2019. It climbed to 34% by the end of...
Over the last half-decade, Enovis has evolved into one of the most exciting companies in orthopedics. Its aggressive M&A strategy and entrepreneurial culture have Enovis on the cusp of $1 billion in annual reconstructive sales. For context, joint replacement made up just 22% of total company sales in 2019. It climbed to 34% by the end of 2022, and we estimate it will comprise nearly half of Enovis’ sales in 2024.
How is Enovis winning at such a high rate? We had an opportunity to ask Enovis CEO Matt Trerotola about the company’s M&A integration process, the expanding importance of enabling technologies and its strategy in the foot and ankle market. Excerpts from our conversation are below, edited for clarity and length.
We know M&A is a strength of Enovis, but have there been any lessons learned during recent integrations?
Matt Trerotola: You’re right. M&A is a core competence for us, going back to our Danaher and Colfax roots. We’ve got a seasoned and disciplined deal team, EGX tools and a great process for integration, planning and execution. We have a very successful track record with over 20 acquisitions in the medtech space in the past five years. We’ve also shown that we can do great deals in ortho and execute them successfully, building our foot and ankle business, globalizing recon and acquiring some key enabling tech for our recon business.
One of the key lessons from our foot and ankle acquisitions was the importance of integrating and aligning the channels fast and with discipline. We’ve been applying this on the Lima acquisition, and really have had great success. We planned to do the channel acquisition quickly and with discipline this year, so that we could put it behind us and have great momentum going forward. And that’s what we’ve done; we’re poised to step into 2025 with tremendous momentum.
How much have you been able to synergize between different products and geographies that recently came into the fold?
Matt Trerotola: That’s part of the strategic driver for these acquisitions. The power of Enovis as an owner has had positive growth impact on Mathys and then Lima more recently. The customers can see the great potential of having a strong global owner like Enovis. Then, beyond that initial boost, the cross-selling starts to kick in. I’ll highlight a few examples.
Mathys had a great anatomic shoulder footprint, but not a very good reverse offering. Now Mathys can sell into its legacy channel two great reverse shoulder systems, the AltiVate and the PRIMA, and also the SMR convertible system that came with Lima acquisition.
Lima was historically strong in knee, not as strong as in hip. Mathys was historically strong in hip, not as strong in knee. So, they’ve had immediate local cross-selling opportunities, and now we’re starting to also bring our great EMPOWR knee into key markets around the world to complement that combined offering. Lima has been very strong and complex revisions and both Enovis and the legacy Mathys channel have benefited from that great revision capability being brought in.
Finally, as we’re working toward approvals outside the U.S. for our ARVIS technology, there’s a lot of excitement within the legacy Lima and Mathys channels about that technology. Given the space and cost pressure in many countries around the world, there’s a lot of excitement about enabling tech in general, but also a lot of excitement about ARVIS’ smaller footprint, smaller cost profile and great technology benefits.
So, it’s early days in terms of financial impact from cross-selling, but as we move into 2025 this will start to become an important part of how we drive above-market growth around the world. Cross-selling is just a start. We have a clear integrated roadmap to drive to stronger and deeper positions in all anatomies over the next three to five years, to sustain that well above-market growth over time.
What’s the main way you’re measuring success for ARVIS? How do you envision that technology evolving over time?
Matt Trerotola: We’re convinced that enabling tech is a big deal. It will be a core dimension of competition, not just as it is today in knees, but over time it’ll be a core dimension of competition in the other anatomies, particularly shoulder.
We’re also convinced that planning and navigation will be the foundation of that in shoulder. If you have great navigation, then you can decide how much automation is valuable for positioning for the cuts or drilling. What’s going to make a difference but add little cost and time into the procedure?
In knees, we’ve been focused on getting ARVIS completely out there in the marketplace, getting tremendous feedback so that we can get this new technology to a place where it can have a strong ramp into the marketplace. We’re excited about where we are. We have some key additional applications coming that are going to accelerate that ramp in 2025.
At the same time, we’re super excited that we’ve gotten ARVIS launched into shoulder. It’s early days in shoulder. We’re just getting some great surgeon feedback. We’re going to be able to act on that quicker in shoulder based on the benefits of the time that we’ve spent developing the product in knee. We’re very excited to have that strong foundation of planning in shoulder through our tremendous MatchPoint planning and now guidance in shoulder through ARVIS.
Foot and ankle is much more competitive now than it has been in recent years. What’s the key to Enovis differentiating itself in that market?
Matt Trerotola: We’ve built a great foot and ankle business that’s got a winning strategy. It’s on a great growth path. We feel confident that we’ve outperformed most players in the space for a couple years now, and we’ve got great momentum. There are three ways we’re focused on differentiating our strategy in that business.
The first is that we have launched some truly differentiated technologies for high value, high patient outcome procedures. The DynaNail family is a great example. It leverages our proprietary NiTiNOL technology. It creates a step change in outcomes for a range of fracture cases. It’s that kind of big, differentiated technology that makes a surgeon want to want to convert and a channel partner want to be our partner.
MIS technologies and bunion is another part of the strategy. Bunion is a huge, growing segment. We’ve got a full range of offerings. We lead with MIS because it provides significant patient benefits, including reduced incision and healing time, but still gets into a great outcome for a portion of indications. Then we wrap around it the rest of our great offering for the full range of bunion indications.
The third part of the strategy is a very strong, aligned channel. More than 60% of our channel is now dedicated to our products, and that number goes up every quarter. We know from the other parts of recon where we participate, that if you can have that strong aligned channel that is investing alongside of you, and you keep feeding great technologies, you can outperform the market for a long time.
What unique challenges and opportunities does Enovis face as a $2 billion company? What’s the main thing you’re focusing on as the business scales up?
Matt Trerotola: Fortunately, there are a lot more opportunities and challenges. You know, we can invest more in the most important innovation priorities. We’ve got more scale and leverage in our supply chain and our commercial contracting. We can attract even more great talent, more great channel partners and tremendous industry-leading KOLs. We’ve almost doubled in the last five years, and I think that gives us more opportunities and more optionality as a company.
I think the key challenge for us is to make sure that we don’t get big and slow. We pride ourselves on the fact that we are agile. We have a great market mix so that we can grow faster than our larger competitors. We tend to make sure that our culture stays entrepreneurial and agile, and then we make the right choices about market participation and organization structure over time to sustain that faster growth profile as we continue to get larger and more scale.
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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.
