USA — Globus Medical has agreed to acquire NuVasive in an all-stock deal valued at US$3.1 billion, with the goal of creating the world’s leading musculoskeletal technology company.
Globus, based in Audubon, Pennsylvania, manufactures products for spinal surgery, imaging, joint reconstruction, and trauma, while NuVasive, based in San Diego, specializes in spine surgery.
The deal brings together two companies targeting the US$50 billion musculoskeletal market, including spine, orthopedics, enabling technology, power tools, biologics, and more.
The combined company will have a presence in more than 50 countries and more than 5,000 employees.
The companies expect to benefit from a larger combined sales presence as well as each other’s operational strengths, such as Globus’ in-house manufacturing capacity and NuVasive’s global distribution networks, as a result of the merger.
Globus Medical has spent the last two decades developing a portfolio of orthopedic implants, robotic surgery systems, imaging machines, and other tools.
NuVasive, founded in 1997, provides a similarly diverse range of devices, including the all-in-one Pulse surgical system, which combines robotic assistance, imaging guidance, and continuous patient monitoring into a single platform.
Globus said in a statement that the combined company could save up to US$170 million in costs over three years.
RBC Capital Markets analyst Shagun Singh wrote in a research note that the combined company will be the second-largest spine business behind Medtronic, with approximately 21% of the global market share.
The transaction comes nearly a year after former CEO Dave Demski stepped down as CEO of Globus Medical.
Globus Medical will pay US$57.72 per share to acquire NuVasive. Under the terms of the agreement, NuVasive shareholders will receive 0.75 shares of Globus Medical Class A common stock for each share of NuVasive common stock.
When the transaction is completed, NuVasive shareholders will own approximately 28% of the combined company, with Globus Medical shareholders owning the remaining 72%.
Once completed, the combined company will have 11 board members, including eight directors from Globus Medical and three directors from NuVasive.
David Paul, chairman of the Globus Medical board of directors, will continue to serve as chairman of the new company’s board, while Dan Scavilla will serve as CEO and board member; Keith Pfeil will serve as CFO of the combined company; and Chris Barry, CEO of NuVasive, will support the combined company’s integration planning.
The transaction is expected to close in the middle of 2023, subject to regulatory approval, shareholder approval from both companies, and other customary closing conditions.