With $1.6B Mazor Robotics Buy, Medtronic Spine is All-in

Medtronic Plc (NYSE:MDT), agreed to buy Mazor Robotics Ltd. (NASDAQ:MZOR), a maker of robotic guidance systems, for $1.64bto strengthen its position in spine surgery. Medtronic’s spine division had been hit off-stride after the problems encountered with Kyphon purchase in 2007. Sales force flux, off-label use of a controversial biologics product, a DOJ investigation and nimble competitors chipping away have challenged Medtronic's spine business. Mazor's core platform technology is transforming spinal surgery from freehand procedures to accurate, guided procedures. 200 Mazor robots have been installed worldwide, of which around 40 are outside the U.S. Spine surgery volume is about 500,000 in the U.S. every year; the Mazor X costs about $850,000; and each surgery results in about $1,500 in disposables sales. There are only two main competitors in the robotics market – Israel-based Mazor and Pennsylvania-based Globus Medical with approved products on the market. The relationship between Mazor and Medtronic began in 2016 when they announced a strategic alliance.

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