Wright Medical To Sell Tornier Business to Corin for $33 Million
According to press releases, Wright Medical Group N.V. plans to sell its Tornier hip and knee business to Corin Orthopaedics Holdings Ltd. for about $33 million in cash. This deal comes shortly after Wright and Tornier merged in October 2015. Wright has sold assets in the hip and knee space in the past. In June 2013, Wright sold its OrthoRecon business to Hong Kong based MicroPort for $290 million.
In a statement, Robert Palmisano, president and chief executive officer of Wright, stated:
Our large joints business has excellent products and significant market share in key European markets with a loyal customer base. However, this business is not in line with our strategy to be the premier extremities and biologics company.
Stefano Alfonsi, chief executive officer of Corin, commented, “We are delighted with the acquisition of Tornier’s clinically proven portfolio of hips and knees.” The acquired portfolio is said to include hip and knee implants sold primarily in France and other European countries. The franchise brands include the Dynacup® and Meije Duo® hip implants and the HLS KneeTec® and HLS Noetos® knee implants.
Corin is a European Orthopaedic manufacturer based in Cirencester, England.
Wright Medical Group N.V. is a global medical device company that provides surgical solutions including for the upper extremities (shoulder, elbow, wrist, and hand), lower extremities (foot and ankle), and biologics markets.
FTC Approves Tornier and Wright Medical Merger
The U.S. Federal Trade Commission (FTC) recently issued a final order that conditionally approves the merger between Amsterdam, Netherlands-based Tornier N.V. and Memphis, Tennessee-based Wright Medical Group, Inc. Reuters reports that the all-stock transaction is valued at about $3.3 billion. Plans for the merger were first announced in October 2014, and approved by the shareholders of both companies in June 2015, subject to receipt of clearance by the FTC. Progress on the transaction was suspended when the FTC expressed concerns that the merger would reduce competition for total ankle replacements and total silicone rubber (silastic) toe replacements in the U.S. market.
The FTC’s Bureau of Competition enforces U.S. antitrust laws and works with the Bureau of Economics to investigate alleged anticompetitive business practices. On occasion, the Bureau urges the Commission to take law enforcement action. In this case, the FTC’s concerns were the final obstacle to the proposed merger. The recent final order, which follows a mandatory public comment period, settles the FTC’s allegations of anticompetitive behavior.
The order calls for Tornier to sell a portion of its U.S. assets and IP rights to Integra Lifesciences Corporation (NASDAQ: IART), a competitor in the U.S. orthopedics space, which is based in Plainsboro, New Jersey. The newly combined company will be required to provide Integra with ankle and toe replacement products for up to three years. Through this arrangement, the FTC seeks to foster competition in the affected market.
In addition to its upper and lower extremity portfolio, the merged companies will maintain a presence in the growing biologics market. Wright Medical recently obtained FDA approval on the Augment bone graft material (left), which is as an alternative to autograft in a variety of arthrodesis procedures. Tornier has developed a line of biologics that includes its BioFiber line of absorbable scaffolds and its Conexa reconstructive tissue matrix, both of which are used for soft tissue repair.
The U.S. market for cell-based therapies for musculoskeletal injuries (orthobiologics) is valued at over $1.5 billion and is expected to grow significantly in 2016. Other market participants in the orthobiologics space include Dublin, Ireland-based Medtronic (NYSE: MDT), San Diego, California-based NuVasive (NASDAQ: NUVA), Kalamazoo, Michigan-based Stryker (NYSE: SYK), and Johnson and Johnson’s West Chester, Pennsylvania-based DePuy Synthes (NYSE: JNJ). Orthobiologics are part of the growing field of regenerative medicine, which includes bioprinting and stem-cell based therapies, and is projected to be worth $6.5 billion in the U.S. by 2019. Bioprinting, itself, has received recent investment and growth.
Following the merger, the resulting company will be renamed Wright Medical Group, N.V. and will be incorporated and headquartered in the Netherlands.
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