Medical technology developer Integra LifeSciences Holdings Corporation IART successfully completed the proposed tax-free spin-off of its subsidiary, SeaSpine Holdings Corporation, well in time. This orthobiologics and spinal fusion hardware business will begin "regular way" trading today on the NASDAQ Global Select Market under the symbol “SPNEV”.
In Nov 2014, Integra had announced its plans to establish its spine business as a separate entity. The company had been witnessing weak revenues across its U.S. Spine and Others segment owing to continued pricing pressure and challenging market conditions. According to management, a spin-off seemed the most viable option in the best interests of shareholders, customers and employees alike. The company expects the transaction to be far more beneficial for Integra and SeaSpine individually, as compared to joint operations.
The spin-off of the spine business is also in sync with Integra’s move to realign its portfolio. In the first half of 2015, the company integrated its five business divisions into three, and, following the spin-off, Integra currently has a two-division global structure. Neurosurgery and Instruments has been combined worldwide under a new division called Specialty Surgical Solutions while Orthopedics and Tissue Technologies has been consolidated globally and added to the extremities business, comprising small bone orthopedics and wound care.
According to Integra, this initiative will accelerate revenue growth at the company. Alongside, it will allow Integra to invest more in top-line growth initiatives, such as sales, marketing and R&D, and access the capital markets. Moreover, the spin-off will expedite Integra's operating margin expansion plan. Management also expects the spin-off to allow a healthier balance sheet for Integra and facilitate access to capital necessary to be invested in relevant business priorities.
Currently, Integra carries a Zacks Rank #2 (Buy). Some other well-ranked stocks in the Med-Biomed/Generic industry are Achillion Pharmaceuticals, Inc. ACHN, Cambrex Corporation CBM and China Biologic Products, Inc. CBPO. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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