Globus Medical Enhances Pain Management Portfolio with Nevro
Expansion of Pain Management Solutions
Globus Medical, a prominent name in musculoskeletal solutions, has announced a significant milestone in its mission to enhance treatment options for patients suffering from chronic pain. The company is set to acquire Nevro Corp, a well-regarded medical device company known for its groundbreaking solutions in pain management, for an all-cash transaction valued at approximately $250 million. This acquisition underscores Globus Medical's commitment to expanding its technological capabilities and offering innovative products that directly address the needs of patients worldwide.
Details of the Acquisition Agreement
Under the terms of this agreement, Globus Medical will purchase all outstanding shares of Nevro at a price of $5.85 per share. Not only does this represent a remarkable 27% premium over Nevro’s average share price, but it also reflects a strong demand for Nevro’s offerings. Both companies' boards of directors have unanimously approved this strategic move, illustrating a shared vision for future growth and patient care advancements.
Strategic Goals and Market Potential
Dan Scavilla, President and CEO of Globus Medical, spoke passionately about the potential of this transaction, stating that it aligns perfectly with their mission to be a leading technology company in musculoskeletal care. By integrating Nevro’s advanced technologies, Globus Medical aims to penetrate new markets and provide cutting-edge solutions in neuromodulation and implant technologies that are critically needed by patients experiencing chronic pain.
Leadership Perspectives on the Acquisition
Kevin Thornal, CEO of Nevro, expressed excitement about joining forces with Globus Medical, emphasizing how their combined resources would enhance the availability of innovative pain management products on a global scale. This collaboration is expected to not only enrich Nevro's existing offerings but also transform it into a more diversified leader in the pain management industry.
Financial Highlights of the Transaction
This acquisition is not just about expanding product lines; it is also a financial opportunity. Globus Medical has reaffirmed its projections for 2025, indicating expected net sales of $2.66 billion to $2.69 billion standalone. Post-acquisition, the company anticipates a rise in net sales to as high as $2.90 billion and aims to improve overall profitability, leveraging Nevro’s established brand and market position.
Projected Revenue Insights
As we look towards the preliminary revenue outlook for both companies, Globus Medical has reported robust preliminary net sales of $2.52 billion for 2024. Meanwhile, Nevro expects to generate about $408 to $409 million in worldwide revenue, solidifying their financial foundation ahead of this transformative acquisition.
Future Financial Reporting and Outlook
The financial results for the year 2024 are set to be announced by Globus Medical soon, which will include insights into the updated outlook for 2025. They are scheduled to report this information during their earnings presentation. Nevro, on the other hand, will report its full-year earnings shortly thereafter, ensuring that stakeholders remain informed throughout this significant transition.
Expert Guidance and Advisory Roles
The strategic transaction also involves key advisory roles from reputed firms. Globus Medical has Morgan Stanley & Co. LLC acting as its financial advisor while Wyrick Robbins Yates & Ponton LLP serves as legal counsel. Nevro has enlisted BofA Securities, Inc. to provide financial advisory, complemented by Latham & Watkins LLP for legal guidance, ensuring thorough navigation of this complex deal.
About Globus Medical and Nevro Corp.
Globus Medical, based in Pennsylvania, prioritizes creating innovative, life-changing solutions in musculoskeletal healthcare, from spine care to trauma and enabling technologies. Nevro, headquartered in California, is at the forefront of developing advanced spinal cord stimulation solutions designed to improve the quality of life for those suffering from chronic pain. This partnership promises to accelerate advancements in both companies and ultimately benefit countless patients.
Frequently Asked Questions
What led to the acquisition of Nevro Corp by Globus Medical?
The acquisition is aimed at expanding Globus Medical's capabilities in chronic pain treatment and enhancing its product offerings in neuromodulation.
What are the financial terms of the acquisition?
Globus Medical will acquire Nevro for $5.85 per share, totaling approximately $250 million, representing significant premiums over prior share prices.
When is the acquisition expected to close?
The transaction is anticipated to close late in the second quarter of 2025, pending shareholder and regulatory approvals.
How will this acquisition impact Globus Medical's financial outlook?
Globus Medical expects the acquisition to increase net sales significantly, projecting a boost to around $2.80 billion to $2.90 billion in 2025.
Who are the financial advisors for both companies during this acquisition?
Globus Medical has engaged Morgan Stanley & Co. LLC and Wyrick Robbins Yates & Ponton LLP, while Nevro is advised by BofA Securities, Inc. and Latham & Watkins LLP.
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