Medical-Device Company Greatbatch to Buy Lake Region Medical
27 August 2015 - 10:10PM
Dow Jones News
Medical-device company Greatbatch Inc. has agreed to buy
privately held Lake Region Medical for about $730 million in cash
and stock, in a bid to expand its offerings to markets including
advanced-surgical and interventional cardiology.
Greatbatch, which makes devices for cardiac, neuromodulation,
and orthopaedic markets, will pay $478 million in cash and issue
5.1 million in shares. Including the assumption of debt, the deal
is valued at $1.73 billion.
Both companies' boards have approved the deal.
The combined company will have about $1.5 billion in revenues
and will serve multiple medical-device segments and energy and
portable medical markets.
Frisco, Texas-based Greatbatch expects the deal to add to its
per-share earnings in the double-digits next year and more so
after.
Synergies from the deal are expected to be about $25 million
next year, increasing to $60 million in 2018. The deal is expected
to close in the fourth quarter of the year.
The deal is the latest tie-up in the medical-devices industry.
Companies have been looking to cut costs and become more efficient
in the face of pricing pressure from hospitals, combined with lower
surgical-procedure volumes because of consumer uncertainty about
the economy, analysts say.
Earlier this year, Zimmer Holdings Inc. completed its deal for
Biomet Inc., creating a giant in the global market for artificial
knees, hips and other orthopedic and bone-mending implants.
In July, St. Jude Medical Inc. agreed to pay $3.4 billion in
cash to acquire Thoratec Corp., the leading maker of a promising
type of heart pump, as the company grapples with stagnant revenue
growth.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 27, 2015 07:55 ET (11:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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