Orthopedic and Spine Sector Consolidations Tighten the Market

Stryker recently announced purchase of Wright Medical for $4b purchase (4.5x revenue and 38.5x EBITDA) is yet another example of the consolidation within the orthopedic and spine sectors.  As reimbursement levels become tighter and margins are challenged, economies of scale become paramount.

Wright Medical is a recognized leader in upper extremities (shoulder, elbow, wrist and hand), lower extremities (foot and ankle) and biologics and provides significant synergies for Stryker.

Earlier in the year, Stryker bought Mobius Imaging (point-of-care imaging) for $370m; Arlington Capital Partners bought Riverpoint Medical (leading edge bioabsorbable suture technologies and orthopedic textile products); Exactech bought EPIC Extremity; and Medtronic bought Titan Spine.

These deals follow bigger deals in years past:

J&J buying Synthes (trauma products) for $21.3b

Blackstone buying Biomet (orthopedic implants) for $10.9b

Medtronic buying Kyphon (spine products) for $3.9b

Integer paying $1.7b for Lake Region (OEM orthopedics)

Smith & Nephew paying $2.7b for Arthrocare (sports medicine implantables).

Keywords: Healthcare Investment Banking, Healthcare M&A, Healthcare mergers, Extremities.