Smith & Nephew makes $660M acquisition to strengthen wound care, orthopedics: 6 details

Spinal Tech

Smith & Nephew acquired a regenerative medicine company for $660 million.


Six things to know:

1. Smith & Nephew acquired Osiris Therapeutics, which includes bone graft and articular cartilage substitutes. The transaction is for $19 per share in cash, with total equity reaching about $660 million.

2. For the nine months ended Sept. 30, 2018, the company reported $102 million revenue, an 18.7 percent year-over-year increase. The purchase price is a 37 percent premium over the 90-day volume weighted average price of Osiris shares.

3. Osiris' 360 employees will likely join Smith & Nephew's team when the transaction is finalized.

4. Chairman and Co-founder of Osiris Peter Friedli entered into a Tender & Support Agreement, committing to tender around 30 percent of the outstanding shares of Osiris in favor of the transaction. The companies expect the transaction to close in the second quarter.

5. Smith & Nephew's existing cash and debt facilities will finance the transaction, which is expected to be accretive to Smith & Nephew's adjusted earnings per share from 2020 and generate a return on invested capital during the third year after the transaction closes.

6. Osiris products include Grafix, a cryopreserved placental membrane skin substitute that treats acute and chronic wounds, as well as BIO4 bone matrix for bone repair. The company's product portfolio also includes Cartiform, an allograft for articular cartilage repair.

"Greater presence in the fast-growing regenerative medicine market enhances our portfolio and will help immediately accelerate our wound management business as well as provide longer term innovations in additional channels and indications," said Smith & Nephew CEO Namal Nawana. "We sought out a fast-growing portfolio with strong clinical evidence addressing critical needs in the marketplace."


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