|Wright Medical CEO Robert Palmisano|
Fresh off a share-raiding FDA rejection, Tennessee devicemaker Wright Medical ($WMGI) has signed a deal to snap up a French orthopedic extremities outfit for $80 million, looking to expand its sales reach around the globe.
Under the deal, Wright gets implant maker Biotech International in exchange for $55 million in cash and $20 million in stock, plus another $5 million in revenue milestones for 2014 and 2015. Biotech International hauled in $15 million in extremities revenue in the 12 months ended June 30, Wright said, and the company's portfolio of foot and ankle implants fits in with Wright's renewed focus on extremities and biologics, CEO Robert Palmisano said.
"We plan to utilize Biotech's strong direct sales channel in France and established distributor presence in emerging markets to extend the reach of our international distribution network and further accelerate growth opportunities in our global extremities business," Palmisano said in a statement.
Foot and ankle implants are of mounting importance for the in-transition Wright, as the company sold off its hip and knee implants business to MicroPort Medical for $290 million over the summer, planning to slim down and make the most of its extremities and biologics segments.
However, one prong of that plan hit a serious roadblock in August when the FDA rejected Augment, a bone graft Wright acquired in its $190 million buyout of BioMimetic Therapeutics this year. The agency wants Wright to conduct another clinical trial on the biologic implant, news that sent the company's shares into a 10% plunge.
Last year, Wright's extremities business posted $214 million in sales, and the company expects up to 12% growth in 2013.
Wright has shuffled its execs and business units since admitting in 2010 that it violated federal anti-kickback laws. The company finally completed a deferred prosecution agreement last fall, and, with hips and knees made things of the past, Wright said it plans to push forward as a more nimble operation focused on high-growth spaces.
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