Here's Why Mazor Robotics Flying Today – The Motley Fool

What happened

Actions of Mazor Robotics (NASDAQ: MZOR), a robotic surgery company focused on spine and brain procedures, jumped 10% at 10:41 am EDT Friday. The two-digit movement is a response to the news Medtronic (NYSE: MDT) acquires the company.

So what

Here are the details of the proposed transaction:

• Medtronic acquires Mazor for $ 58.50 per share, or about $ 1.64 billion.
• Since Medtronic already holds a significant amount of Mazor shares, the net purchase price will be $ 1.34 billion.
• The transaction will be made in cash.
• The boards of directors of both companies have already approved the transaction unanimously.
• The transaction is expected to close in the third fiscal quarter of Medtronic, which ends on January 25, 2019.
• The transaction is expected to be "moderately dilutive" for Medtronic's adjusted earnings during the 2019 fiscal year.

Geoff Martha, executive at Medtronic, praised the deal:

The acquisition of Mazor adds robot-assisted guidance systems to our growing portfolio of enabling technologies, and we intend to continue to develop Mazor's innovation legacy in surgical robotics. with the site and the Israel team as a basis for future growth.

Mazor CEO Ori Hadomi was also excited about the potential of the combined companies:

The full integration of the Mazor team and the product portfolio in Medtronic will maximize our global impact through Medtronic's channels, advance the leading position of our systems in the market and stimulate achieving our vision of innovation.

Now what

Medtronic controls a significant amount of Mazor stock and certainly has the financial strength to carry out this transaction. Given that the two boards have already been unanimous in this transaction, it looks like an agreement reached.

Personally, this shareholder thinks that this acquisition makes a lot of sense, but I am disappointed to no longer be able to participate in the rise of Mazor in the long term. Since this seems to be a fait accompli, my plan is to sell my shares as soon as the Fool's business guidelines allow and move the product to another very promising healthcare company.

Brian Feroldi owns shares in Mazor Robotics. The Motley Fool owns shares of Medtronic. The Motley Fool recommends Mazor Robotics. Motley Fool has a disclosure policy.