Kyphon to be Purchased by Medtronic
In a deal that received unanimous approval from both Boards, Medtronic, Incorporated will purchase Kyphon, Incorporated to the tune of $3.9 billion. Medtronic is acquiring the remaining shares of Kyphon for 32 percent higher than the stock’s closing price on July 26th, at $71 in cash. The purchase price does not include over $320 million associated with Disc-O-Tech Medical Technologies and St. Francis Medical Technologies.
The combined product lines of the two companies are complementary. The deal will expand Medtronic’s product line to include devices to support spinal repair in the elderly who have compression fractures or spinal nerve damage. While Medtronic has a number of treatments for degenerative disc disease, their products are geared for the younger population.
Another tool that Medtronic will acquire through the Kyphon purchase is the minimally invasive approach, kyphoplasty. This approach is used to repair damage to the spine that displaces bone.
Another benefit of the acquisition is an expanded marketing circle. Kyphon has customers from radiology and neuroradiology, while most of Medtronic’s customers in this area are orthopaedists and neurologists who treat spine disease. This may help accelerate marketing of Medtronic’s complete product line.
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July 30, 2007 Related topics: Corporate Financials