Integra (IART) to Advance ENT Division With New Buyout Deal
Integra Lifesciences Corporation IART signed a definitive agreement to acquire Acclarent for $275 million in cash at closure. The is subject to normal acquisition price adjustments and an additional $5 million upon the completion of specific regulatory milestones from Johnson & Johnson MedTech firm Ethicon.
It is worth mentioning that Integra will be among the top suppliers of ENT products and technologies following closure. Acclarent is a leading player in ENT procedures.
Financial Details
After the acquisition closes, Integra anticipates providing comprehensive guidance on its financial effects.
It is anticipated that the transaction will be concluded by the second quarter of 2024, subject to usual closing conditions and regulatory clearances. Transition services, including transition manufacturing services, will be offered for a maximum of four years after the closing.
Significance of the Acquisition
The transaction will be integrated into Integra's Codman Specialty Surgical (CSS) business unit. The neurosurgery section is greatly enhanced by the ear, nose and throat (ENT) category, which is a crucial area of strategic importance.
This acquisition presents Integra with a rare opportunity to become a key player in the ENT segment. The ENT segment is an anatomical adjacency to neurosurgery. The acquisition will offer opportunities for ENT and neurosurgeons to collaborate closely on tumor care using skull base approaches.
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The acquisition offers a unique chance to expand and take the lead in the desirable ENT device market thanks to Acclarent's well-established commercial scale, well-known brand, distinctive portfolio and active innovation pipeline.
Industry Prospects
Per a report by Grand View Research, the global ENT devices market size was valued at USD 23.0 billion in 2022 and is expected to witness a CAGR of 5.74% from 2023 to 2030. Increasing penetration of minimally invasive ENT procedures, growing prevalence of ENT-related disorders and rising geriatric population are key trends stimulating market growth. Technological advancements also play an important role in the market’s growth.
Progress Within the CSS Arm
Integra sees healthy demand for its industry-leading products within Codman Specialty Surgical (CSS). The segment is benefiting from growing market acceptance of the company’s global neurosurgery line-ups, including CSS management and neuromonitoring. Within CSS management, Integra is experiencing growth banking on strong market adoption of programmable valves and advanced energy (key revenue-generating products are CUSA Capital, Mayfield, DuraGen, Certas Plus programmable valves, Bactiseal catheters and instruments). The company expanded the international reach of the CUSA platform and registered DuraGen, DuraSeal, Mayfield and Duo LED lighting in EMEA and Latin America.
The company also launched DuraGen Plus in China. In CereLink, Integra made progress on resolving the electrical interference issue in its monitors and relaunched it in the international market in the third quarter of 2023. The company also filed an updated 510(k) in the United States in mid-September, with an expected launch of the product early in the first quarter of 2024. Overall, the CSS arm is expected to witness a revenue CAGR of 6.9% from 2021 through 2025.
Price Performance
In the past year, IART’s shares have declined 24.5% compared with the industry’s fall of 2.5%.
Zacks Rank and Key Picks
Integra carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Haemonetics HAE, Insulet PODD and DexCom DXCM. While Haemonetics and DexCom each carry a Zacks Rank #2 (Buy), Insulet presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it posted an earnings surprise of 5.3%.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have plunged 40.9% in the past year compared with the industry’s decline of 7%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days. Shares of the company have fallen 7.8% in the past year compared with the industry’s decline of 7.1%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Integra LifeSciences Holdings Corporation (IART) : Free Stock Analysis Report
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