Integra LifeSciences ($IART) provided the reorganization-of-the-day today as the industry shakeup continues amid continuing med tech merger mania. The Plainsboro, NJ, company announced plans to spin off its spine business into a new publicly traded company dubbed SeaSpine focused on selling spinal implants and orthobiologics.
In fact, the company has been an enthusiastic participant in the reorg game, having purchased surgical soft tissue repair products for $235 million in January from Covidien ($COV), as well as some of Medtronic's ($MDT) surgical instrumentation lines for $60 million in September.
"These strategic changes create a much stronger platform for organic growth and execution, and we believe both companies will grow faster separately than together," said Integra CEO Peter Arduini in a statement about the latest move. "Moving forward, Integra will have a simpler, more focused structure from which to operate, which should improve our ability to achieve our longer-term growth and margin improvement objectives. Further, we believe these moves create exciting opportunities for our shareholders and both organizations."
SeaSpine had trailing 12-month revenues of $140 million as of Sept. 30, Integra said. The company's to-be-spun-off spine unit sells a plethora of devices, including interbody devices, minimally invasive surgery solutions, and deformity correction products, the release says. In addition, the new company will sell the IsoTis brand of orthobiologics.
Former SeaSpine CEO and co-founder Kirt Stephenson will become the new company's chairman of the board.
Integra plans to focus on orthopedic and tissue technologies focused on the extremities, wound care, and specialty surgical solutions in neurosurgery and surgical instrumentation. The company already makes a variety of devices in these areas, such as the Integra Compact Cranial Closure System, Integra Bilayer Wound Matrix and Integra Freedom Wrist.
The company will discuss the news during its earnings call today at 4:30 p.m. It expects the transaction to close within 12 months.
Integra becomes the latest med tech company to shed noncore businesses to focus on what it does best amid the industry-wide reorganization. Some companies, like consumer-focused Kimberly-Clark, are exiting the device business all together. Its spinoff, Halyard Health, debuted on the New York Stock Exchange on Monday.
- read the release