Issue link: https://beckershealthcare.uberflip.com/i/653721
17 PRACTICE MANAGEMENT SPINE DEVICE & INNOVATION NuVasive Acquires Ellipse for $380M By Laura Dyrda N uVasive acquired Ellipse for $380 million upfront cash payments and the potential for $30 million more payable in 2017 for reaching specific revenue targets. NuVasive expects to fund the acquisition with existing cash-on- hand. e acquisition will likely accelerate NuVasive's revenue growth toward the high single-digit range and be slightly accre- tive to the company's non-GAAP diluted earnings per share for the first 12 months aer the transaction; it's expected to become significantly accretive thereaer. NuVasive's goal is to reach dou- ble-digit return on invested capital goal over the next five years, and acquiring Ellipse fits into the company's strategic plan. Surgeons are adopting Ellipse's magnetic growing rod technol- ogy for pediatric deformity cases, providing growth opportunities for NuVasive. NuVasive currently focuses on adult degenerative and deformity spinal conditions. Ellipse also has a robust product pipeline to enhance NuVasive's internal development and licens- ing opportunities. e boards of directors from both companies agreed to the acquisition. e transaction completed in early 2016. NuVasive maintained a Design Center of Excellence in Aliso Viejo, Calif., where Ellipse is headquartered. Ellipse's President and CEO Edmund J. Roschak joined NuVasive as a member of the executive leadership team. Goldman, Sachs & Co., is the ex- clusive financial adviser to NuVasive and DLA Piper is the legal counsel. Piper Jaffray is exclusive financial advisor to Ellipse and Latham & Watkins is the legal counsel. "Ellipse's revolutionary technology, which has been enthu- siastically received by surgeons, has the potential to become the standard of care for spine and orthopedic patients," said NuVasive Chairman and CEO Gregory T. Lucier. "It is NuVa- sive's sweet-spot of game-changing innovation, bolstering our leadership in spine and providing new growth opportunities in the U.S. and around the world." Ellipse Technologies withdrew its initial public offering in early February, according to a Renaissance Capital report. Ellipse originally filed an S-1 to raise $75 million through an IPO last fall. e company planned to use the proceeds to expand sales and marketing in addition to research and develop- ment initiatives for its MAGEC-EOS spinal bracing system and PRECICE limb lengthening system. Piper Jaffray, William Blair and Canaccord were lead bookrunners in the IPO and Oppenheimer was the co-manager. e company had been listed on the NASDAQ Global Market under MGEC. n Call: 888.416.2409 info@eSutures.com eSutures.com Lock in Big Savings with eSutures.com! Over 1,000 Synthes Items 30-40% Off Every Day! From individual screws, plates and instruments to complete sets, eSutures has all your surgical needs in stock, and ready to ship today! Low prices everyday, no contracts or minimum order requirements. We look forward to serving you soon! *Offer expires 6/30/16. Limit 1 per customer. Use promo code: SPINE10 for 10% OFF your order of $50 or more!* Stryker Makes 3 Key Acquisitions in 2016 Q1 By Allison Sobczak S tryker acquired Sage Products from Madison Dearborn Partners for $2.7 billion. Madison Dearborn Partners acquired a majority ownership position in Sage Prod- ucts in December 2012. Sage Products, a developer of products to prevent hospi- tal-acquired conditions, plans to continue to operate under its existing brand name as part of Stryker's medical division. Stryker also acquired all assets from Synergetics USA's neuro portfolio in an all-cash transaction. The neuro portfolio includes the Malis generator, Spetzler Malis disposable forceps and Stryker's existing Sonopet tips and RF generator. Synergetics achieved OEM sales of around $31 million last year. However, the transaction is expected to be neutral to Stryker's 2016 earnings per share excluding acquisition, integration-related and intangible amoritization changes and accretive thereafter. Finally, Stryker announced plans to acquire 100 percent of Physio-Control's stock in an all-cash transaction for $1.28 billion. Physio-Control is a Bain Capital portfolio company focused on mointors and defibrillators. Physio-Control's sales last year totaled $503 million and will expand Stryker's global footprint. n