NuVasive, Globus Medical ink $3.1B orthopedic device merger, sending investors scrambling

Two long-standing makers of implants and surgical tools for orthopedic procedures are set to combine into a single musculoskeletal device powerhouse.

NuVasive and Globus Medical announced their plans to merge in a joint press release Thursday. Under the terms of the all-stock deal, NuVasive shareholders will receive 0.75 of a Globus share for each of their NuVasive holdings. That values each share of NuVasive stock at about $57.72 and adds up to a total equity value of $3.1 billion for the merger.

The price tag represents a premium of more than 20% over NuVasive’s trading price, which hasn’t cracked the $50 mark since mid-August 2022. In the month leading up to the deal’s announcement, it maxed out around $48 per share. Wednesday, the day before the merger was announced, NuVasive's stock closed at $45.78.  When the merger plans went public Thursday morning, NuVasive's share price briefly shot back up past the 30-day high, but settled down closer to $47 by the end of the day.

The deal hit Globus’ stock harder, though. After spending the preceding month hovering around an average of $75, the company’s share price plummeted 18% on Thursday morning, then continued to slip throughout the day, ultimately closing at $63.

Once the combination is complete, Globus’ shareholders will own about 72% of the resulting company, and NuVasive’s will retain the remaining 28% share.

Despite investors’ wariness, the companies expressed optimism that the combination would give their devices a stronger foothold in the $50 billion musculoskeletal market, thanks to a pooled sales team and a combined footprint spanning more than 50 countries around the world.

Globus Medical has spent the last two decades building out a portfolio of spinal implants, robotic surgery systems, imaging machines and other tools needed for orthopedic procedures. NuVasive, which was founded in 1997, offers a similarly broad range of devices, including the all-in-one Pulse surgical system that combines robotic assistance, imaging guidance and continuous patient monitoring into a single platform.

“Together, we will be able to offer an exceptional portfolio of clinically proven solutions, supported by strong commercial and surgeon education teams,” NuVasive CEO Chris Barry said in this week’s announcement. “The new company will be well positioned to deliver value creation for shareholders, further support our surgeon partners—and most importantly, change the lives of more patients.”

The merger is expected to close by mid-2023. At that time, Globus CEO Dan Scavilla and Chief Financial Officer Keith Pfeil will retain their titles, while NuVasive’s Barry will stay on to “support integration planning of the combined company,” per the release.