Enovis (NYSE:ENOV) announced today that it entered into a definitive agreement to acquire orthopedic implant maker LimaCorporate.
Wilmington, Delaware-based Enovis — one of the 10 largest orthopedic companies in the world — values the deal at approximately $846.4 million (€800 million). The deal includes a $740.6 million (€700 million) cash payment at closing. The remaining $105.8 million (€100 million) comes in the form of shares of Enovis common stock.
Lima, a global orthopedic company, develops digital innovations and patient-tailored hardware. It aims to empower surgeons and improve patient outcomes following joint replacement surgery.
Enovis says the addition of Lima establishes a $1 billion reconstruction business and expands its international scale. It also expects improved efficiency with state-of-the-art manufacturing facilities and a strong innovation engine. The company said the addition of Lima brings a complementary portfolio, including 3D-printed trabecular titanium.
According to a news release, Enovis sees cross-selling opportunities with $40 million in cost synergies to be fully realized by year three. The company expects the deal to support its long-term goals of high-single-digit organic revenue growth.
“We are confident the acquisition of Lima will enable us to build on our strong growth trajectory and global leadership in orthopedic solutions to create immediate and sustainable value for our patients, customers, employees and shareholders,” said Matt Trerotola, chair and CEO of Enovis. “With Lima’s complementary surgical solutions and customers, we will have the opportunity to enlarge our profitable recon portfolio and further expand our global presence. In addition, this acquisition will enable us to deliver enhanced financial results through significant cross-selling revenue growth opportunities and meaningful cost synergies.”
More details of the Enovis acquisition of LimaCorporate
The deal marks the second big acquisition this year for Enovis. It bought minimally invasive surgical platform developer Novastep in June.
Enovis expects to pay the initial cash at closing, with its stock to be issued within 18 months after closing. The company plans to finance the deal with cash on hand and availability under its existing revolving credit facility. Additionally, the company expects to use committed financing from UBS Investment Bank and J.P. Morgan Securities. UBS serves as lead financial advisor and J.P. Morgan also serves as a financial advisor in this deal.
The company expects revenues between $290 million and $300 million from Lima in 2024. It earmarked early 2024 for the completion of the transaction. It makes no changes to its previously announced 2023 guidance. Enovis expects a neutral to slightly accretive impact to adjusted EPS from Lima in 2024, with an accretive effect in 2025 and beyond.
“Combining these two leading orthopedic businesses into one global platform creates an exciting opportunity to build on the strengths of both Enovis and Lima in developing patient-tailored devices and orthopedic products,” said Massimo Calafiore, CEO of Lima. “I look forward to working with the Enovis team to create even greater opportunities for growth and continued success.”
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