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Integer Holdings (ITGR) Boosts Product Line with New Buyout

Zacks Equity Research

Integer Holdings Corporation ITGR recently acquired certain assets of US BioDesign — a company manufacturing complex braided biomedical structures for disposable and implantable medical devices. The buyout is likely to add to Integer Holdings’ already broad and robust product portfolio, thereby strengthening its position of being a partner of choice for advanced medical technologies.

Notably, US BioDesign caters to cardiovascular, neurovascular and general surgery markets with nitinol, stainless steel, polymer and other braided structures. These in turn have been enabling the next generation of structural heart, peripheral vascular, neurovascular and electrophysiology products.

Financial Terms of the Acquisition

An upfront payment of $15 million and potential contingent payments in the future comprise as the terms of the agreement. Notably, the acquisition is expected to have a negligible impact on Integer Holdings’ sales and adjusted EPS for the full year 2019.

Benefits of the Deal

The buyout is likely to add differentiated capability for complex braided and formed biomedical structures to Integer Holdings wide array of product portfolio. Moreover, the transaction will enable the company to partner with its customer base to aid patients by developing life-saving medical devices. This in turn is likely to help Integer Holdings to stay ahead of the curve.

Consequently, the buyout will not only allow Integer Holdings to better serve its customers and patients worldwide but also accelerate growth.

Additionally, the acquisition is expected to provide a boost to Cardio and Vascular product line.

Market Prospects

Per a report by Fortune Business Insights, the global medical devices market size accounted for $425.5 billion in 2018 and is anticipated to reach $612.7 billion by 2025 at a CAGR of 5.4% from 2018-2025.  Increase in geriatric population, rising prevalence of chronic conditions and growth in surgical procedures are expected to drive the market during the aforementioned time period.

Notably, emerging markets hold great prospect for biomedical materials space.

Zacks Rank and Price Performance

Currently Integer Holdings has a Zacks Rank of 3 (Hold). Shares of the company lost 4% on a year-to-date basis, compared with the industry’s decline of 6.9%. Meanwhile, the S&P 500 index rallied 16% in the same timeframe.


Key Picks

Some better-ranked stocks from the broader medical space are Nissan Chemical Corporation NNCHY, Fresenius Medical Care AG & Co. KGaA FMS and McKesson Corporation MCK, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank  (Strong Buy) stocks here.

Nissan Chemical has a long-term earnings growth rate of 10%.

Fresenius Medical has a long-term earnings growth rate of 5.9%.

McKesson has a long-term earnings growth rate of 6.9%.

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