Smith & Nephew's M&A blitz rolls on with Brazilian buy

Smith & Nephew CEO Olivier Bohuon

U.K. orthopedics giant Smith & Nephew ($SNN) has been riding its checkbook into emerging markets all year. Now, the company has signed a deal to pick up a share of its Brazilian wound-care partner, Politec Saúde, with an eye on vertical integration.

Under the deal, S&N will buy one quarter of Politec Saúde for an undisclosed sum, absorbing 30 employees and effectively cutting out the middleman for the Brazilian distribution of its growing wound-care offerings. The Politec deal is S&N's fourth emerging-markets-focused buyout of 2013, and CEO Olivier Bohuon said his company is snapping up its distributors to better entrench itself around the globe.

"Being closer to the customer is at the heart of our emerging markets strategy," Bohuon said in a statement. "Brazil is an exciting long-term opportunity and this is an important investment which creates a significant platform from which we can grow."

S&N has long made its money on orthopedic implants. With pricing pressures and demand declines forcing those markets into rapid maturity, Bohuon has led the charge of diversification. Last year, the company bet big on wound care with a $782 million deal for Healthpoint. Now, it's crossing the map to expand its reach, this year acquiring a Brazilian surgical devices distributor, an Indian trauma business and a Turkish partner.

Don't expect the deal flow to subside. In August, Bohuon said he had $1.5 billion and a board-approved green light to hunt down deals that could help wean S&N off of its reliance on slow-growth sectors.

Last quarter, S&N boosted revenue by 5% to about $1 billion as a 12% leap in its Healthpoint-fueled wound-care business offset a 3% decline in its banner surgical-devices segment.

- read the announcement

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