Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0781
    -0.0013 (-0.12%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2622
    +0.0000 (+0.00%)
     
  • USD/JPY

    151.2910
    -0.0810 (-0.05%)
     
  • Bitcoin USD

    70,444.39
    +757.53 (+1.09%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,338.74
    +170.67 (+0.42%)
     

Integra to Buy Medtronic's MicroFrance, Xomed; Shares Up

Leading medical technology developer Integra LifeSciences Holdings Corporation (IART) has inked a definitive agreement to buy a portfolio of 4,000 surgical instruments of the MicroFrance and Xomed manual ENT and laparoscopic instrumentation product lines from medical device major Medtronic, Inc. (MDT).

Following this news, Integra's share price jumped 1.6% to eventually close at $49.76 on Friday.

The transaction, worth approximately $60 million in cash, is expected to close in the fourth quarter of 2014, contingent on customary closing requirements. Integra will finance this acquisition with cash held outside the U.S.

In 1998, ear, nose and throat (ENT) surgical instruments producer Xomed had acquired MicroFrance – a private manufacturer and distributor of hand-held instruments for ENT, plastic surgery and endoscopy. Later, in 1999, Medtronic bought Xomed for $736 million in stock.

Currently, Medtronic's MicroFrance business – which also incorporates Xomed's manual ENT instruments – designs, produces and sells recyclable handheld devices for ENT and laparoscopy surgical specialists at the St. Aubin le Monial manufacturing facility in France.

As part of the deal, Integra will also acquire the MicroFrance manufacturing facility at St. Aubin. Integra will also gain access to R&D, service & repair and other infrastructure that already exist in this facility. This, in turn, should enhance Integra's potential to develop innovative products as well as mobilize its existing product lines.

Sales from Integra's acquired products aggregated $30 million in the last reported annual results, two-thirds of which were generated from the international market. Management expects to maintain this trend by augmenting Integra's international presence with the MicroFrance buyout.

The takeover of these surgical instruments is expected to boost Integra's worldwide Neurosurgery business as well, which delivered a 10% organic growth in the last reported quarter. We expect this acquisition to be accretive to Integra's Instruments business, specifically in the international market.

Bolstered by this acquisition, Integra expects to achieve sales of approximately $27–$30 million in 2015 with adjusted earnings of approximately 10 cents per share. The earnings accretion is expected to accrue only after the first year, on completion of certain sales transitions.

Moreover, Integra also estimates the acquisition to contribute sales not exceeding $5 million in the fourth quarter of 2014 while remaining neutral to earnings.

Currently Integra carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Med-Biomed/Generic industry include are Cambrex Corporation (CBM) and China Biologic Products, Inc. (CBPO). Both these stocks sport a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on MDT
Read the Full Research Report on IART
Read the Full Research Report on CBM
Read the Full Research Report on CBPO


Zacks Investment Research

Advertisement