Symmetry Medical (SMA), an instrument supplier to orthopedic devices makers, has wrapped up its acquisition of privately-held electrosurgical instruments maker Olsen Medical in an all cash transaction. The deal was announced on August 3, 2011. The financial terms of the transaction were not divulged by the entities.
Louisville, Kentucky-based Olsen Medical is a leading maker of a comprehensive suite of single-use and reusable forceps, cords, electrosurgical pens/pencils, electrodes and accessories, which are primarily marketed in the U.S. and internationally through distributors. Its products include the 20-0XXX series single-use bipolar forceps and the 75800 electrosurgical pencil. Olsen’s U.S. distributor network includes Symmetry’s fully-owned unit Specialty Surgical Instrumentation (“SSI”).
The acquisition augurs well for Symmetry and fits in with its strategy to diversify its product range and boost direct hospital business. The company envisions the acquisition to be neutral to its fiscal 2011 results (excluding acquisition-related charges) and accretive to 2012 results. Symmetry, during its most recent earnings call, pared its revenue and earnings forecasts for fiscal 2011 factoring in the Olsen Medical acquisition and prevailing market trends.
Symmetry is the largest OEM provider of orthopedic implants and instruments to orthopedic devices manufacturers. Its major customers include Johnson & Johnson’s (JNJ) DePuy, Stryker (SYK) and Zimmer Holdings (ZMH).
Symmetry Medical’s “Total Solutions” approach has differentiated it from the rivals and provided a substantial growth opportunity. Most of its customers are expanding outsourcing, realizing the benefits of a “One-stop shop” solution that allows them to focus their efforts on marketing and R&D.
Symmetry is investing in revamping its management structure and enhancing customer collaboration, which should support growth. Moreover, the company should benefit from higher demand for its solutions as its major customers ramp up spending and accelerate product launches.
However, Symmetry still faces price and procedure volume pressure on the orthopedic front. Also, the company’s high spending may continue to weigh on its bottom line. Currently we are Neutral on Symmetry Medical.
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
SYMMETRY MEDICL (SMA): Free Stock Analysis Report
STRYKER CORP (SYK): Free Stock Analysis Report
ZIMMER HOLDINGS (ZMH): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment