RTI Surgical Inc. RTIX recently executed a deal to acquire Zyga Technology Inc., a privately-held medical device company, based in Minnesota. However, successful closing of the deal is subject to filing with the state of Delaware. Currently, the Delaware Department of State is closed owing to unfavorable weather conditions.
Financial terms of the deal are still under wraps. Upon the closing of the deal, RTI Surgical will fund the acquisition through a combination of cash and borrowing under existing credit facility.
About Zyga
Zyga Technology is dedicated toward research, development and commercialization of surgical solutions. The company provides economic value in the treatment of underserved conditions of spine.
Zyga is known for two of primary medical devices — SImmetry Sacroiliac Joint Fusion System (SIJF) and Glyder Facet Restoration Device. SImmetry Sacroiliac Joint Fusion System is a minimally invasive spine surgery procedure designed to help stabilize the SI joint. The Glyder Facet Restoration Device is intended to provide relief from lumber facet pain and restoring facet joint function.
The company generated approximately $4 million in annual revenues.
RTI Surgical, Inc. Price and Consensus
A Strategic Move
RTI Surgical expects the Zyga Technology’s SImmetry Sacroiliac Joint Fusion System to leverage the competency of Spine franchise. The acquisition is in line with the company’s motto of strategic transformation toward increased operational excellence as it will lead to reduced complexities in the surgical procedures.
Market Prospect
The SIJF market has seen significant growth in the current years and its market is estimated to be $100 million in the United States. By 2024, the SIJF is expected to exceed $200 million. The growth can be attributed to an increase in procedure volumes and technology adoption by new surgeons. Per iData Research, more than 80% of the U.S. population is likely to suffer from lower back pain at some point in their lives.
Shares Look Up
Over the last year, RTI Surgical has had a smooth run on the bourse. The stock has rallied 34.8% compared with the industry's gain of 25.6%.
Zacks Ranks & Key Picks
RTI Surgical has a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are ABIOMED Inc. ABMD, Tactile Systems Technology TCMD and Intuitive Surgical Inc. ISRG, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank Stocks Here.
ABIOMED’s long-term growth rate is expected to be an impressive 31.5%. The stock has rallied 72.8% which is way above the industry’s gain of 25.6%, in the last year.
Tactile Systems has a long-term growth rate of 20%. The stock has rallied 81.5% and has outperformed the industry, over the last year.
Intuitive Surgical has a long-term growth rate of 9.2%. Over the last six months, the stock has rallied 20.1%, surpassing the industry’s gain of 6.7%.
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