Smith and Nephew buys sports medicine company ArthroCare for $1.7b
- POSTED: 03 Feb 2014 19:07
British medical equipment maker Smith & Nephew said on Monday that it has agreed to buy US peer ArthroCare Corp for $1.7 billion to strengthen its sports medicine division.
LONDON: British medical equipment maker Smith & Nephew said on Monday that it has agreed to buy US peer ArthroCare Corp for $1.7 billion to strengthen its sports medicine division.
Smith & Nephew said in a statement it will pay $48.25 in cash per ArthroCare share. That marked a premium of 6.3 per cent to Friday's closing level.
"This is a compelling opportunity to add ArthroCare's technology and highly complementary products to further strengthen our sports medicine business," added S&N chief executive Olivier Bohuon.
"Together, we will be able to generate significant additional revenue from the more comprehensive portfolio, combined sales force and Smith & Nephew's global footprint.
"With this transaction, we are again accelerating our strategy to re-balance Smith & Nephew towards higher growth."
The group added that it expected "substantial" cost and revenue savings to add $85 million to annual trading profit in the third full year.
However, S&N cautioned that one-off transaction expenses and integration costs would total approximately $100 million over the next three years.
"ArthroCare and S&N know each other well from our licensing and supply arrangements, and this is a natural transaction for both companies," added David Fitzgerald, President and CEO of ArthroCare.
"The board believes that this transaction is in the best interest of our shareholders."