Smith & Nephew to buy ArthroCare in $1.5B deal

Feb 03, 2014 by The Associated Press

British medical technology company Smith & Nephew plans to buy U.S. medical device maker ArthroCare in a $1.5 billion deal that it says will strengthen its sports medicine business.

Smith & Nephew said Monday it will pay $48.25 in cash for each share of ArthroCare Corp., which is based in Austin, Texas.

That's a premium of about 6 percent to its closing price of $45.38 on Friday.

Smith & Nephew PLC said ArthroCare's expertise in shoulder joint repair will complement its strength in knee repair. CEO Olivier Bohuon said in a statement that the broader product portfolio and the combined sales force will help generate "significant additional revenue."

ArthroCare has 35.4 million shares outstanding, counting options and restricted stock, according to Smith & Nephew spokesman Charles Reynolds. Smith & Nephew values the deal at $1.7 billion counting ArthroCare's cash. It expects the acquisition to close by the middle of the year.

ArthroCare makes surgical devices, instruments and implants and employs about 1,800 people.

Its stock jumped 6.8 percent, or $3.08, to $48.36 on Monday, less than an hour before markets opened

The stock had already climbed 13 percent so far this year, as of Friday's close. Much of that gain came after the company announced on Jan. 7 that it will pay a $30 million fine to resolve an investigation by the U.S. Department of Justice into alleged securities fraud by its former management.

The Justice Department also is charging the company with one count of conspiracy to commit securities fraud and wire fraud, but it has entered into a two-year deferred prosecution agreement with ArthroCare. If the company meets requirements set by the Justice Department, it won't bring charges against the company.

ArthroCare has said that deal will end the Justice Department's investigation, which was first made public in December 2008.

U.S.-traded shares of Smith & Nephew closed at $72.24 on Friday.

Explore further: Bayer launches 1.9-bn-euro bid for Norway's Algeta

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Liberty Global to buy Dutch cable operator

Jan 27, 2014

Liberty Global PLC, the cable company chaired by American tycoon John Malone, says it will buy the 71.5 percent of Dutch cable provider Ziggo NV it doesn't already own for around 10 billion euros ($13.7 billion) ...

Recommended for you

Out-of-patience investors sell off Amazon

6 hours ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

States ascend into the cloud

13 hours ago

Seven years ago, the state of Delaware started moving computer servers out of closets and from under workers' desks to create a consolidated data center and a virtual computing climate.

Microsoft drops Nokia name from smartphones

15 hours ago

Microsoft said Friday it was dropping the Nokia name from its Lumia smartphones, rebranding following the acquisition earlier this year of the Finnish group's handset division.

Amazon's loss makes holidays a question mark

15 hours ago

Amazon's trademark smile icon is becoming more of a grimace. The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

User comments : 0