Medical technology company Enovis Corp. has announced its agreement to acquire LimaCorporate S.p.A., a renowned orthopedic company specializing in motion restoration through innovative implants. This strategic deal involves a cash payment of 700 million euros ($745 million) at the time of closing, along with an additional EUR100 million in Enovis stock.
Creating a Revenue Powerhouse
The acquisition aims to form a robust reconstruction business, anticipated to generate a staggering $1 billion in revenue. Notably, approximately half of this revenue is expected to stem from the rapidly growing extremities sector. By joining forces, Enovis and LimaCorporate will fortify their position as leaders in the field.
Unlocking Surgical Technological Advancements
Enovis' acquisition of LimaCorporate also brings forth cutting-edge surgical technologies, including the revolutionary 3-D printed trabecular titanium— a lightweight biomaterial known for its exceptional properties. This addition to Enovis' portfolio promises to further enhance their ability to provide advanced solutions in the orthopedic landscape.
Future Outlook and Growth Potential
Enovis envisions that LimaCorporate will contribute significantly to its growth, with projected sales of $290 million to $300 million by 2024. The acquisition is expected to conclude in the early months of the year. Despite this transformative undertaking, Enovis remains steadfast in its commitment to achieving organic sales growth of 7% to 7.5% for the full year of 2023 and expects adjusted per-share earnings of $2.22 to $2.36.
Financial Arrangements and Outlook
The financing for this transaction will be a combination of cash on hand, an existing revolving credit facility, and committed funding from UBS and JPMorgan. While the deal is anticipated to have a neutral to slightly accretive impact on Enovis' adjusted EPS in 2024, it is expected to be accretive starting from 2025 and beyond.
A Year of Promise
Enovis shares have experienced a 3.5% decline year-to-date. Nevertheless, amidst the dynamic landscape, this acquisition positions Enovis as a key player in the industry, poised for future success. In contrast, the S&P 500 has recorded a 12.5% gain during the same period.
