Medical-device giant Medtronic to buy Mazor Robotics for US$1.6bn

Dublin-based medical-device maker Medtronic PLC (NYSE:MDT) announced Thursday that it has reached a deal to acquire Mazor Robotics Ltd (NASDAQ:MZOR) for about US$1.64bn, as the company looks to boost its technology for robotic-assisted spine surgeries.

Under the agreement, Medtronic will acquire all outstanding ordinary shares of Israel-based Mazor Robotics for US$58.50 per American Depository Share, or US$29.25 per ordinary share, in cash.

The deal is expected to close during Medtronic’s third fiscal quarter, ending January 25.

“We believe robotic-assisted procedures are the future of spine surgery, and provide surgeons a more precise, repeatable, and controlled ability to perform complex procedures. 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,” Geoff Martha, executive vice president and president of the Restorative Therapies Group at Medtronic, said in a statement.

“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.”

BIG PICTURE: ROBO Global captures the high-octane growth of robotics and artificial intelligence

Mazor Robotics is one of the components of the ROBO Global Robotics & Automation Index which has grown significantly over the last five years, returning a compound annual 19%, comfortably outperforming other benchmarks. The ROBO index is used as a performance benchmark for funds and market growth and financial institutions use it as a basis for exchange-traded funds, also known as ETFs.

Mazor’s core platform technology includes the Mazor X Robotic Guidance System, and the Renaissance Surgical-Guidance System, which are transforming spinal surgery from freehand procedures to accurate, guided procedures. By combining Medtronic’s market-leading spine implants, navigation, and intra-operative imaging technology with Mazor’s robotic-assisted surgery (RAS) systems, Medtronic intends to offer a “fully-integrated procedural solution” for surgical planning and execution.

The companies plan to showcase their technology integration at the upcoming North American Spine Society annual meeting in Los Angeles next week.

Medtronic expects the transaction to be “modestly dilutive” to its fiscal 2019 adjusted earnings per share. However, the device maker expects the acquisition to “generate a double-digit return on invested capital by year four, with an increasing contribution thereafter.”

Shares of Medtronic were flat at US$97.40 in premarket trade, while shares in Mazor Robotics shot up 9.8% to US$57.90.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors