Specialty orthopedic company, Wright Medical Group Inc. (WMGI), recently announced that Tornier N.V. (TRNX) has voluntarily withdrawn and refiled its Hart-Scott-Rodino ("HSR") notification and report form. The form is related to the previously announced merger between the two companies.
The Hart-Scott-Rodino Act is essentially an antitrust law, under which companies about to merge are required to file with and get the approval of the Federal Trade Commission (“FTC”).
The withdrawal and refiling of the HSR form will now allow the FTC some time to review the proposed transaction in the initial phase. The waiting period under the HSR Antitrust Improvements Act will now expire on Jan 28, 2015.
Previously, Wright Medical had announced that the company will merge with Tornier NV, to create a new entity valued at $3.3 billion. The new company, to be called Wright Medical Group NV, will be led by Wright Medical's current CEO Robert Palmisano.
Wright Medical has traditionally relied on its lower extremities offerings while, Tornier, on its part, banks on upper extremities. The merger eyes the formation of a company that will possess the most comprehensive upper and lower extremity product portfolios in the market.
The Tornier merger has significant long-term prospects for Wright Medical. The merger, once successfully completed, is expected to create a more diversified and high growth extremities-biologics pure-play with broad reach across 3 of the fastest growing orthopedics markets (shoulder, foot & ankle, and biologics).
Also, the merger should prove accretive to Wright Medical once the integration is successfully over. Wright Medical experienced a weaker-than-anticipated third quarter wherein loss per share incurred was much wider than expected.
The merger possesses the potential to drive top-line growth and combined EBITDA improvement for Wright Medical. Subsequently, it should also help the company deliver better earnings per share.
Zacks Rank
Wright Medical currently has a Zacks Rank #3 (Hold). Better-ranked stocks that warrant a look in the Medical Products space are ICU Medical (ICUI) and OraSure Technologies (OSUR). Both ICU Medical and OraSure sport a Zacks Rank #1 (Strong Buy).
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