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Smith & Nephew considering deal for NuVasive: FT
Posted on Monday, 11 February 2019 15:03
Shares in NuVasive rose 15.0 per cent after the Financial Times (FT) cited people familiar with the matter as saying Smith & Nephew are interested in acquiring the US-based medical instruments manufacturer for over USD 3.00 billion.

According to the sources, the exact terms of the discussions could not be learned and there is no guarantee the talks will lead to a deal.

However, should one be reached, it would represent Smith & Nephew’s largest ever acquisition, according to Zephyr, the M&A database published by Bureau van Dijk.

The potential UK-based buyer, which is also a maker of equipment for the health and surgical markets, is looking to expand its existing product lines in orthopaedic reconstruction, sports medicine and wound care.

NuVasive, with a market capitalisation of USD 2.55 billion, has seen its shares jump 15.0 per cent to USD 56.80 at 09:08 today, following the FT report on 8th February 2019, marking a significant improvement given stocks have been down 32.0 per cent since an October high.

The possible target is billed as a world leader in minimally invasive, procedurally-integrated spinal medical devices, that help transform spine surgery from complex deformities to degenerative conditions.

While NuVasive’s full year financial results for 2018 are due to be released on 20th February 2019, the group did suggest that it is expecting to post revenue of USD 1.10 billion for last year.

In the nine months to 30th September 2018, revenue totalled USD 813.39 million, on a loss before income taxes of USD 7.61 million.

Shares in Smith & Nephew, best known for its hip and knee replacements, have increased 23.0 per cent over the last 12 months and the group was valued at GBP 13.30 billion on 8th February 2019.

If the acquisition of NuVasive goes ahead, it would represent the first big move by new chief executive Namal Nawana, who took over less than a year ago and is said to be focused on dealmaking, the FT reported.

However, when contacted by the paper, both companies declined to comment on market speculation or rumours.

© Zephus Ltd