In a bid to expand its footprint in the emerging markets, Smith & Nephew plc (SNN) recently decided to acquire certain assets of its Turkish distributor Plato Grup. The acquisition will promote distribution of Smith & Nephew’s orthopedic reconstruction, trauma and sports medicine products in Turkey.
Financial terms of the deal have not been disclosed. However, the company expects to close this acquisition in the second half of 2013.
Smith & Nephew is encouraged by the potential of this deal, as Turkey is one of the fastest growing emerging markets. Furthermore, Plato’s successful record as well as reputation and business relations will boost the company’s growth in Turkey.
In recent times, Smith & Nephew has undertaken several initiatives to strengthen its product portfolio and expand its global foothold. In May 2013, the company announced an agreement to take over Adler Mediequip Private Limited and with it the brands and assets of Sushrut Surgicals Private Limited, a leader in mid-tier, orthopedic trauma products for the Indian market. The Adler Mediequip buyout gives Smith & Nephew an opportunity to gain a foothold in the growing trauma market in India.
Last month, Smith & Nephew unveiled a strategic partnership to promote its IV3000 range of cannula dressings from its Advanced Wound Management (:AWM) franchise in U.K. The company’s persistent focus on the AWM franchise has already begun to yield positive results.
Smith & Nephew also stands to gain from an improved economic overview in the U.S. and stability in the orthorecon market. Meanwhile, the trauma and extremity businesses represent high-growth avenues.
Smith & Nephew currently carries a Zacks Rank #2 (Buy). Other medical stocks such as Natus Medical (BABY), Wright Medical Group Inc. (WMGI) and ResMed Inc. (RMD) appear impressive. These stocks carry a Zacks Rank #1 (Strong Buy).
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