Symmetry agreed to divest its OEM solutions business to contract manufacturer Tecomet for $450 million, saying the move will help it stay ahead of a predicted wave of consolidations in the OEM solutions competitive market.
The device maker also announced that it would transfer its surgical division to shareholders of record, granting them 1 share of the new public company for each 4 shares of Symmetry Medical stock.
"We are excited to reach this agreement with Tecomet, which will recognize the value of the OEM Solutions business and enhance the growth potential of Symmetry Surgical," president & CEO Thomas Sullivan said in prepared remarks. "It also provides liquidity for our shareholders along with the upside potential of Symmetry Surgical as a well-positioned, standalone company focused on the large global market for surgical instruments.”
Symmetry cited a fleet of reasons for the reorganization, chief among them its desire to pursue strategic acquisitions to "maintain a leadership position" as consolidations become more popular. Other rationale included the need to separate OEM solutions from Symmetry Surgical in order to avoid "customer conflicts" and protecting the surgical business from volatility in the OEM market.
The announcement preceded a big boost in SMA shares, which gained 8.9% to trade at $9.59 as of about 3:10 p.m. EST. The stock has dropped 4.9% since the start of the year.