12th Mar 2007 07:29
Smith & Nephew Plc12 March 2007 Smith & Nephew buys major European orthopaedic business 12 March 2007 Smith & Nephew plc (LSE: SN, NYSE: SNN), the global medical technology business,announced today that it has agreed the purchase of Plus Orthopedics Holding AG("Plus") a private Swiss orthopaedic company for a total of CHF* 1086 million($889 million) in cash, including assumed debt. Plus had gross assets of CHF436 million ($357 million) at 31 December 2006. The acquisition of Plus has compelling strategic logic; • this increases Smith & Nephew's share of the global orthopaedicreconstruction market to around 12%, taking Smith & Nephew to global number 4 • doubles Smith & Nephew's share of the European orthopaedicreconstruction market • brings a highly complementary product range • is highly synergistic, bringing good opportunities to leverage thecombined sales force in Europe and Asia and cost opportunities from increasedmanufacturing leverage and capacity utilisation as well as better use of thecombined marketing and sales infrastructure • is expected to be broadly EPSA** neutral in 2007 and accretive in 2008and beyond, and to exceed the Group's cost of capital in the third full yearfollowing acquisition Plus was founded in 1991 and has its origins in European designed cementless hipsystems. Plus has worked closely with European surgeons to design and develop awide product range of orthopaedic implants primarily hips and knees, and alsosmall joint and shoulder products. The product range is highly complementary toSmith & Nephew's and includes threaded acetabular cups and revision products forhips, hinged fixed and mobile bearing designs for knees. Plus has manufacturingfacilities in Switzerland and China. Plus reported revenues of CHF367m ($300m) in 2006, an increase of 16% over theprior year, and profit before interest and tax of CHF44m ($36m), an increase of33% over 2005. Smith & Nephew will be financing the acquisition by bankborrowings. Sir Christopher O'Donnell, Chief Executive Officer of Smith & Nephew plc,commenting on the acquisition said "We are delighted to bring on board thisleading European orthopaedics business which we have been following for a numberof years. The acquisition of Plus marks a step change in our European presenceand strengthens our portfolio of products. Our orthopaedics reconstructionbusiness will have increased scale and scope as a result. We welcome Plus'semployees to Smith & Nephew and we look forward to building on theircapabilities, especially in Europe and Asia." Robert Riedweg, Delegate of the Board and Chief Executive Officer of Plus,commented on the transaction as follows "During the last few months, the Boardof Directors and the Executive Board of Plus have thoroughly evaluated thestrategic options for our company. We are convinced that a combination withSmith & Nephew is the optimal solution for our customers and our employees. Thestrong market position of Smith & Nephew will enhance the ability of Plus tofurther develop and market our first class orthopaedic products. Smith & Nephewalso offers excellent prospects for our business." A conference call to discuss this announcement will be held at 9.30am GMT /5.30am EST today, Monday 12 March. This will be broadcast live on the web andwill be available on demand shortly following the close of the call at http://www.smith-nephew.com. A podcast will also be available at the same address. Ifinterested parties are unable to connect to the web, a listen-only service isavailable by calling +44 (0)20 7138 0814 in the UK or +1 (718) 354 1158 in theUS. Analysts should contact Samantha Hardy on +44 (0)20 7960 2257 or by emailat [email protected] for conference call details. * Smith & Nephew reports in US Dollars and all numbers in this announcementwhich originate in Swiss Francs have been converted to US Dollars at CHF 1.221:$1. ** Earnings per share before amortisation of acquisition intangible assets andintegration costs. Enquiries Smith & Nephew plcLiz Hewitt Tel: +44 (0) 20 7401 7646Group Director Corporate Affairs Plus Orthopedics Holding AGSimon Vischer Tel: +41 (0)41 798 41 59 Financial Dynamics for Smith & Nephew David Yates/ Deborah Scott - London Tel: +44 (0) 20 7831 3113Jonathan Birt - New York Tel: +1 212 850 5634 About Smith & Nephew Smith & Nephew is a global medical technology business, specialising inOrthopaedic Reconstruction, Orthopaedic Trauma and Clinical Therapies, Endoscopyand Advanced Wound Management products. Smith & Nephew is a global leader inarthroscopy and advanced wound management and is one of the leading globalorthopaedics companies. Smith & Nephew is dedicated to helping improve people's lives. The Companyprides itself on the strength of its relationships with its surgeons andprofessional healthcare customers, with whom its name is synonymous with highstandards of performance, innovation and trust. The Company has 8,800 employeesand operates in 33 countries around the world generating annual salesapproaching $2.8 billion. Forward-Looking Statements This press release contains certain "forward-looking statements" within themeaning of the US Private Securities Litigation Reform Act of 1995. Inparticular, statements regarding expected revenue growth and trading marginsdiscussed under "Outlook" are forward-looking statements as are discussions ofour product pipeline. These statements, as well as the phrases "aim", "plan","intend", "anticipate", "well-placed", "believe", "estimate", "expect","target", "consider" and similar expressions, are generally intended to identifyforward-looking statements. Such forward-looking statements involve known andunknown risks, uncertainties and other important factors (including, but notlimited to, the outcome of litigation, claims and regulatory approvals) thatcould cause the actual results, performance or achievements of Smith & Nephew,or industry results, to differ materially from any future results, performanceor achievements expressed or implied by such forward-looking statements. Pleaserefer to the documents that Smith & Nephew has filed with the U.S. Securitiesand Exchange Commission under the U.S. Securities Exchange Act of 1934, asamended, including Smith & Nephew's most recent annual report on Form 20F, for adiscussion of certain of these factors. All forward-looking statements in this press release are based on informationavailable to Smith & Nephew as of the date hereof. All written or oralforward-looking statements attributable to Smith & Nephew or any person actingon behalf of Smith & Nephew are expressly qualified in their entirety by theforegoing. Smith & Nephew does not undertake any obligation to update or reviseany forward-looking statement contained herein to reflect any change in Smith &Nephew's expectation with regard thereto or any change in events, conditions orcircumstances on which any such statement is based. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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