Smith & Nephew share price: Group snaps up Zimmer’s knee implant business
Smith & Nephew Plc (LON:SN) has snapped up the Zimmer Unicompartmental High Flex Knee (ZUK) system in the US market, the FTSE 100 artificial hips and knees manufacturer has said. The deal comes with Zimmer required to divest some assets after buying rival orthopaedic products maker Biomet.
Smith & Nephew’s share price closed little changed yesterday, adding 0.36 percent to 1,115p. The shares have gained just under seven percent over the past year.
The FTSE 100 group announced in a statement yesterday that it had agreed to acquire the ZUK system, a clinically proven uni knee replacement introduced in 2004, as well as all existing inventory and certain intellectual property for the US market. Smith & Nephew, however, did not disclose the financial terms of the deal.
“Our acquisition of this product line expands our access to a fast growing segment of the joint reconstruction market,” Brad Cannon, Smith & Nephew’s President of Global Orthopaedic Franchises, said in the statement.
News of the deal came after Zimmer announced yesterday that it had completed its $14 billion (£9 billion) acquisition of rival Biomet, following the receipt of US Federal Trade Commission clearance, which, however, was conditional on the divestment of certain assets. Smith & Nephew noted in the statement that the ZUK acquisition would complete within three business days following the close of the merger between Zimmer and Biomet.
In a separate development, earlier this week, analysts at UBS moved their recommendation on Smith & Nephew from ‘neutral’ to ‘buy’, pointing to the group’s wound division, as well as to the company’s prospects in the US market.
“With a renewed focus on the US, catalysed by disappointing performance in the first half of 2014, Smith & Nephew could regain share and benefit from the significant operating leverage,” the analysts said, as quoted by the Guardian, adding that they were raising Smith & Nephew’s 2019 group earnings per share estimates by 11 percent.
As of 08:06 BST, Thursday, 25 June, Smith & Nephew plc share price is 1,115.00p.