Mazor Robotics (NSDQ:MZOR) said today that it inked a 2-phase deal with Medtronic (NYSE:MDT) for its robot-assisted spine surgery technology that includes a co-promotion agreement and an equity investment that could see Medtronic wind up with a 15% stake in the Israeli company for as much as $42 million.

Caesarea, Israel-based Mazor said the 1st phase of the deal calls for Medtronic to acquire 15 Mazor systems this year. It also makes Medtronic Mazor’s sole partner for developing and commercializing robot-assisted spine surgery devices; if both meet their milestones by the endof 2017, the deal is slated to progress to the 2nd phase. Mazor said its already working with Fridley, Minn.-based Medtronic on the development of “synergistic” spine products “and will begin working closely together to meet designated sales targets through a defined methodology for cooperation.”

The 2nd phase involves a 3-step equity investment by Medtronic, in which the world’s largest pure-play medtech maker would 1st pay $12 million for a 4% stake in Mazor. The 2nd tranche, triggered by Mazor achieving operational milestones, would see Medtronic acquire a 6% stake at the 20-day average share price for MZOR stock. In the 3rd tranche, triggered by the 2nd tranche and the execution of a global distribution agreement – but executed at Mazor’s discretion – Medtronic would buy another 5% stake, again at the 20-day MZOR average. Mazor said Medtronic can cap the 2nd and 3rd tranches at $20 million apiece.

“The structure of the commercial agreement features some very important points for our customers as well as our shareholders,” Mazor CEO Ori Hadomi said in prepared remarks. “New developments, such as synergistic implants, could generate new revenue streams for Mazor, beyond the anticipated growth in our current revenue streams from capital equipment, service agreements and disposables. The synergy between the organizations’ teams will potentially yield operational efficiency benefits for Mazor.”

Mazor said it plans to stay independent and will still market its Renaissance robot-assisted surgery platform.

MZOR shares jumped 26.2% to $13.41 apiece in pre-market trading today.