|NuVasive CEO Greg Lucier|
Spine specialist NuVasive ($NUVA) bolstered its product lineup when it acquired Ellipse in January. Now, the San Diego-based company is looking toward increasing its value-based healthcare offerings with the $98 million acquisition of Biotronic NeuroNetwork, which monitors patients' nervous systems during surgery.
Biotronic provides real-time, remote monitoring of patients' neurophysiology to more than 650 hospitals and supports more than 45,000 surgeries each year. Privately traded, it posted more than $50 million in revenue in 2015, according to a statement announcing the deal. NuVasive expects the acquisition to be immediately accretive in 2016 and significantly so in 2017 and beyond. The transaction is expected to close in early July 2016, subject to customary closing conditions. NuVasive expects to fund the acquisition with existing cash on hand.
"The addition of Biotronic enhances our service offerings and provides enormous potential to deliver greater integration across our procedurally-integrated portfolio, which uniquely differentiates NuVasive in the markets we serve," CEO Greg Lucier said in the statement.
The company reorganized itself into a "combined sales and services organization" early last year. The Biotronic deal will double NuVasive's service business in the U.S. and help propel the company toward its goal of providing "spine continuum of care" from "diagnostics on the front-end to measuring clinical value on the back-end and everything in between," as stated by Lucier on the Q1 2016 earnings call.
Thanks to the reorg, NuVasive saw a 25% year-over-year increase in its NVM5 nerve monitoring system business in Q1, Lucier said on the call. And while its core spinal hardware unit was up 15% in Q1, and showed accelerated growth for the fifth time in a row, Lucier made clear his plans to expand the spine unit even further by improving its service offerings.
"We remain evermore committed to growing our spine service line partnerships and infusing our expertise to help our hospital partners transform how spine procedures are approached, measured and valued from a clinical and economic perspective," Lucier said in the statement.
The Biotronic buy marks NuVasive's third acquisition this year. The company entered the scoliosis space in January, with the $380 million Ellipse buy creating the NuVasive Specialized Orthopedics business. In March, NuVasive picked up its Brazilian distributor in a bid to boost stagnant international sales.