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Smith & Nephew discussed the purchase of NuVasive, a manufacturer of medical instruments used in spine surgery, under a contract worth more than $ 3 billion. of dollars. This is the largest acquisition by the UK group of medical devices, people with direct knowledge of the negotiations. I said.
The exact terms of any discussion could not have been learned and discussions between the two parties could collapse, said these people. It is possible that the revelation of the discussions will lead to the end of the discussions.
If an agreement is reached, the acquisition would be the first major initiative of S & N Chief Executive Namal Nawana since taking office less than a year ago.
In a short time, Mr. Nawana overhauled much of the FTSE 100 leadership and began discussing the use of contract negotiation as a means of growth in companies adjacent to his existing product lines in the US. areas of orthopedic reconstruction, sports medicine and wound care.
The Californian company NuVasive has a market value of about $ 2.5 billion, not to mention a debt of about $ 500 million. The company's stock price fell 32% from its peak in October when it appointed a new CEO. Shares of NuVasive jumped 24 percent after trading hours on Friday after the Financial Times announced the talks.
At the same time, S & N's shares rose 23% over the past year, giving the company a market value of £ 13.3 billion. The agreement would combine S & N, renowned for its hip and knee replacements, to a fast-growing company.
S & N declined to comment, while NuVasive did not immediately respond to a request for comment.
NuVasive announced a $ 1.1 billion increase in sales in 2018, up 5%, ahead of acquisitions and currency movements, surpbading the 2% increase in underlying revenues recorded by S & N, 163 years old. NuVasive's results, however, were below Wall Street's expectations, which weighed on its shares. UBS badysts warned in January that the spine surgery market may be slowing down.
In a telephone conversation with badysts this week, Nawana said S & N was considering contracting "to gain access to adjacent markets for which the strategy was in line". He said the company's low level of conversion and the high conversion of its cash flow gave it the ability to trade.
The company's chief financial officer added that investors should expect the group to maintain its investment grade credit rating, but that its net debt to net income ratio before interest-related tax depreciation could go from 2 to 2.5 times, up from the current level. 0.8 end 2018.
The British group has faced pressure from activists, including Paul Singer's Elliott Management, to separate itself from underperforming activities, and has often been touted as a potential buy-out by major competitors. US. S & N's board is led by its chairman, Roberto Quarta, the head of private equity, who also heads the board of the advertising and marketing group WPP.
Mr. Nawana has a history as a negotiator. He led the recovery of medical diagnostics maker Alere before overseeing its sale to Abbott in 2017 for $ 7.8 billion, including debt. However, the sale of the company ran into difficulties. Abbott finally agreed to buy the company at a lower price after Alere had been subpoenaed to the grand jury regarding its business practices and delayed the filing of an annual report to the regulators. securities.
Prior to Alere, Mr. Nawana spent more than 15 years at Johnson & Johnson, including as President of the Spine DePuy Synthes business.
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