DENTSPLY Sirona Inc. XRAY is set to acquire Israel-based MIS Implants Technologies for $375 million in cash. The transaction is expected to be accretive to adjusted earnings within the first twelve months of the deal closure.
MIS Implants Technologies is a northern Israel (Savion)-based dental implant manufacturer that has a strong customer base across 65 countries, with annual sales of approximately $80 million.
According to data available from Markets & Markets, the global dental implants market is estimated to grow at a CAGR of 7.2% for the forecasted period of 2015-2020. We believe that the latest acquisition will help DENTSPLY to grab significant market share in the long run.
Merger and Acquisition activities have been a key growth driver for DENTSPLY for long. The recently completed merger with Sirona was a key positive for the company. The combined entity will benefit from revenue and cost synergies in 2016 and beyond.
Also, the emerging markets provide significant opportunities for the combined company as these areas are vastly untapped with low dental products penetration.
However, integration will be a risk in the near term. Additionally, higher capital expenditure on product development coupled with persistent decline in sales is expected to put margins under pressure.
Zacks Rank & Key Picks
DENTSPLY has a Zacks Rank #3(Hold).
Better-ranked stocks in the medical space are Halyard health HYH, Bard C R Inc. BCR and Conmed Corp CNMD. While Halyard health holds a Zacks Rank #1 (Strong Buy), both Bard C R and Conmed Corp carry a Zacks Rank #2 (Buy).
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