The world’s largest medical device maker has held a position in Mazor, which makes the Mazor X guidance system and the Renaissance robot-assisted spine surgery platform, since May 2016. In September they closed the third, $40 million tranche of the investment, giving Medtronic a 10.6% stake it paid $72 million for.
Now all of the Fridley, Minn.-based company’s chips are in the pot with the $58.50-per ADR share offer to acquire Mazor, which is based in Caesarea, Israel. The offer works out to $29.25 (ILS104.80) per share, for a total of roughly $1.34 billion net of the existing stake and acquired cash.
Medtronic said it plans to develop a fully-integrated surgical planning, execution and confirmation system by uniting its existing spine technologies with the Mazor robotic system once the deal closes, expected during Medtronic’s fiscal third quarter ending Jan. 25.
“We believe robotic-assisted procedures are the future of spine surgery, enhancing surgeons’ abilities to perform complex procedures with greater precision, consistency and control. Medtronic is committed to accelerating the adoption of robotic-assisted surgery and transforming spine care through procedural solutions that integrate implants, biologics and enabling technologies,” restorative therapies president Geoff Martha said in prepared remarks. “The acquisition of Mazor adds robotic-assisted guidance systems to our expanding portfolio of enabling technologies, and we intend to further cultivate Mazor’s legacy of innovation in surgical robotics with the site and team in Israel as a base for future growth.”
“Today is a historic day for spine surgery and a defining event in the market’s evolution, and I want to acknowledge and thank all of those whose contribution and faith have been so critical and impactful to our success,” added Mazor CEO Ori Hadomi. “The Mazor team and product portfolio’s full integration into Medtronic will maximize our impact globally through Medtronic’s channels, advance our systems’ leadership position in the marketplace, and drive the realization of our vision to heal through innovation.”
Medtronic said it expects the deal to be “modestly dilutive” to adjusted earnings per share this fiscal year, noting that its scale should allow it to “absorb the dilution.”
Perella Weinberg Partners and Goldman Sachs & Co. acted as financial advisors for Medtronic, with Meitar Liquornik Geva Leshem Tal and Ropes & Gray as legal advisors. Mazor’s financial advisors were J.P. Morgan Securities and Duff & Phelps, with Kirkland & Ellis and Luchtenstein Levy Wiseman as legal advisors.