Smith & Nephew pursues emerging market M&A, plus $300M share buyback

Smith & Nephew ($SNN) is pursuing a massive share repurchasing program and continuing a quest for new acquisitions.

The U.K. medical device giant said it will launch a $300 million share buyback, all as part of a "new capital allocation framework," according to Reuters. But its latest acquisitions are just as interesting. As Bloomberg reports, the U.K. medical device maker quietly snatched up India's Adler Mediequip Private Ltd. and along with it, the brands and assets of Sushrut Surgicals Private Ltd. Both are focused on orthopedic trauma products in India. Additionally, Smith & Nephew now owns Pro Cirurgia Especializada, a Brazilian distribution operation. The grand total for all: about $70 million, according to the article.

Smith & Nephew bought Healthpoint Biotherapeutics last November for $782 million, a wound care company, vastly deepening its focus in the space as hip- and knee-implant sales have stagnated. This purchase and the most recent ones reflect an ongoing commitment to expanding in both wound-care and minimally invasive surgical products. And the company's investment in emerging markets hedges against pricing pressures and sales declines in Europe and the U.S.

As far as the share buyback, this amounts to an effort to boost value in the face of sluggish revenue and a dip in earnings per share. Reuters notes that the company's 2013 first quarter revenue came in at about $1.75 billion, essentially flat with the $1.79 billion figure from the same period last year. Earnings per share are also down, hitting 18.5 cents, versus 19.3 cents in the 2012 first quarter. Bloomberg explains that sales would have risen 1%, save for the May 2012 spin-off of the company's biologics and clinical therapies business (now known as Bioventus).

Broken down, hip and knee implants and trauma device sales have declined in recent months, but wound care sales are growing steadily.

- read the Bloomberg story
- here's Reuters' coverage (and here)

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