Symmetry Medical Inc. (SMA) revealed that the Federal Trade Commission has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (HSR) for its definitive agreement to divest its OEM Solutions business to Tecomet.
Symmetry Medical announced the sale of its OEM Solutions business to privately-held Tecomet at the beginning of last month. The deal is valued at $450 million in cash or $7.50 per share after fees and elimination of outstanding debt. The company expects the transaction to be completed by the end of 2014.
According to Symmetry Medical, the proposed sale will recognize the value of the OEM Solutions business and enhance the growth potential of Symmetry Surgical, in addition to providing liquidity to shareholders.
Concurrent with the sale of the OEM Solutions business, Symmetry Medical Inc.'s shareholders will receive ownership in a new public company that will spin out at the closing and include the company's Symmetry Surgical business.
Symmetry Medical’s divestment of its U.K. based subsidiary, Clamonta Ltd. on May 22, 2014 was also in sync with its plans to focus on its core markets and reduce its manufacturing footprint. The divestment will lead to long-term benefits but negatively affect earnings and revenues in 2014.
Symmetry Medical posted a 60.0% rise in adjusted earnings per share to 16 cents in the 2014-second-quarter ended Jun 28, 2014, from 10 cents reported in the same quarter of 2013. Adjusted earnings per share also surpassed the Zacks Consensus Estimate of 12 cents by 33.3%.
Second-quarter revenues totaled $101.3 million, up 2.3% year over year, edging past the Zacks Consensus Estimate of $99.0 million. Revenues were primarily driven by higher sales in the company's OEM Solutions segment, partially mitigated by a decrease in revenues at the Symmetry Surgical segment.
Currently, Symmetry Medical carries a Zacks Rank #2 (Buy). Other stocks that are also worth a look from the medical products industry include ICU Medical, Inc. (ICUI), Abaxis, Inc. (ABAX), and NuVasive, Inc. (NUVA). ICU Medical sports a Zacks Rank #1 (Strong Buy), while both Abaxis and NuVasive carry a Zacks Rank #2 (Buy).
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