Smith & Nephew (SNN) Buys Brainlab, Braces Robotic Ecosystem

Zacks Equity Research - Posted 4 years ago

Recently Smith & Nephew plc SNN closed its acquisition of the Brainlab orthopaedic joint reconstruction business. The deal, initiated in March 2019, is in line with the company’s strategy to invest in cutting-edge technologies, which will help accelerate its presence in the multi-asset digital surgery and robotic ecosystem space.

Financial terms of this acquisition deal were kept under wraps. Apart from the orthopedic major’sbusiness purchase, the transaction includes certain intangible assets as well as the orthopaedic Brainlab salesforce, which will be integrated into the company’s robotics commercial organisation.

Brainlab Business at a Glance

This business provides digital workflow tools starting from pre-operative planning to intraoperative navigation to postoperative evaluation and sharing. It already has a huge customer base, which after getting incorporated into Smith & Nephew, will help the company expand its niche market. Currently, the technology is being used in more than 40,000 orthopaedic cases each year at more than 500 accounts worldwide.

Strategic Implication of the Business

With the completion of the acquisition, Smith & Nephew can now access a broad range of Brainlab technologies in cloud computing, tracking, augmented reality, robotics, AI, machine learning, image fusion and anatomical segmentation.

Smith & Nephew SNATS, Inc. Price

Smith & Nephew SNATS, Inc. Price

Smith & Nephew SNATS, Inc. price | Smith & Nephew SNATS, Inc. Quote

Per Smith & Nephew, the integration of Brainlab Business will helpdevelop applications in orthopaedic reconstruction and sports medicine. The consolidation will also open up opportunities to penetrate other surgical specialties.

According to Smith & Nephew, besides a growing clientele base, the combined business will also lead to a powerful digital ecosystem, which will deliver advanced clinical solutions, bolstering Smith & Nephew’s technology arm for robotics.

Smith & Nephew on Buyout Binge

Smith & Nephew is fortifying its footprint through inorganic growth path. In April, it concluded the acquisitions of regenerative medicine products maker Osiris Therapeutics and Leaf Healthcare, the developer of the unique Leaf Patient Monitoring System.

Earlier, in January, the company closed the buyout of CeterixOrthopadics, the developer of NovoStitch Pro, a device for meniscal repair. , can now add to our future growth as we move throughout 2019.

Price Performance

In the past three months, shares of the company have outperformed its industry. The stock has rallied 10.7% against the industry’s 1.8% decline.

Zacks Rank and Other Key Picks

Smith & Nephew currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the broader medical space are Cerner Corporation CERN, Penumbra PEN and Bruker Corporation BRKR. While Cerner sports a Zacks Rank #1 (Strong Buy), Penumbra and Bruker carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cerner’s long-term earnings growth rate is expected to be 13.5%.

Penumbra’s long-term earnings growth rate is projected at 21.5%.

Bruker’s long-term earnings growth rate is estimated at 11.7%.

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