Piper Sandler analyst Matt O’Brien said the acquisition was unlikely to materialize because Globus Medical tends to pay “modest” prices for assets, according to a Nov. 15 report. He also noted that turnover in the sales personnel of the target company can make acquisitions in the spine space problematic.
“We do believe NuVasive is undervalued, the addition of Simplify would be welcome at Globus Medical and the management team at Globus would likely be able to pull a ton of costs of the combined entity; but, at the end of the day, we simply do not see it happening,” Mr. O’Brien said in the report.
Bank of America analyst Craig Bijou pointed to different corporate cultures at NuVasive and Globus Medical in a Nov. 16 report. Mr. Bijou said the NuVasive acquisition was unlikely because spine deals have a “tough” track record of integrations.
“We also do not think that adding a slower-growth, lower-margin business to gain scale would be a good use of Globus Medical’s nearly $1 billion in cash,” he said in the report.
Initial rumors of the acquisition led to a 9 percent jump in NuVasive’s stock Nov. 15.
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